Wednesday, April 29, 2009

2009-04-29 Spoliation Triple Play

Another catch-up digest.

Spoliation: Three decisions for this installment, one addressing both spoliation standard under both Colorado state and federal common law standards, a second addressing spoliation under Minnesota law, and a third addressing both the independent tort of negligent spoliation (in Illinois) and spoliation under federal common law. The third decision also involves discussion about the interplay (or tension) between the Fed. R. Civ. P. Rule 15(a) liberal pleading amendment standard and the Fed. R. Civ. P. Rule 16(b) imposition of a “good-cause” threshold barrier to granting such amendments after passage of a case management order pleadings-amendment deadline

All errata acknowledged in advance.



Salvatore v. Pingel, 2009 WL 943713 (D. Colo. 2009)
Vitelli v. Knudson, 2009 WL 910846 (Minn. App. 2009)
Mintel Intern. Group, Ltd. v. Neergheen, 2009 WL 1033357 (N.D. Ill. 2009)

Salvatore v. Pingel

Citation: 2009 WL 943713 (D.Colo. 2009)
Date: 2009-04-06
Topics: Spoliation standards for Colorado federal courts and under Colorado state law, notice of representation alone insufficient to trigger duty to preserve

One interesting factoid about spoliation decisions is that they are rarely appealed to a U.S. circuit court of appeal. What practitioners now face are a mass (or mess, depending on one’s p.o.v.) of decisional authority that is as often conflicting as it is harmonious. For instance, in this decision, the Court relies extensively on Second Circuit and Southern District of New York (aka Zubulake) decisional authority, but recedes from strict application of a party’s duty to preserve.

That said, this decision, from the U.S. District Court for the District of Colorado involved a plaintiff allegedly injured by a van driven by defendant’s employee. The Court notes that “there was evidence that the “van’s brakes may have malfunctioned in connection with the accident. Deposition testimony of the van driver (defendant’s employee) revealed that the driver had complained about the performance of the van’s brakes, that a vehicle inspection conducted the day before the accident reported a “brakes low” status, and that a written inspection report, signed by defendant’s manager, stated that “above defects [were] corrected.”

Plaintiff alleged that five pieces of documentary evidence had been destroyed:

“(1) The Vehicle Inspection Report which People's Choice drivers were required to prepare on a daily basis, Motion for Sanctions;
(2) The Annual Inspection Report which was required to be completed annually and to be preserved for one year;
(3) The Maintenance Log which is a record of all maintenance work done on a vehicle and which is required to be maintained for 18 months after the vehicle is sold;
(4) The Accident Register which must be maintained for three years following an accident; and
(5) The Safety Manager's Inspection Report which is prepared by the company's safety manager following an investigation conducted to determine whether an accident was preventable.”

Defendant conceded the destruction of documents 1-4 but asserted that plaintiff was provided with a copy of document 5 under a different title. As for the destroyed documents, defendant “…argue[d], however, that those documents were destroyed as a routine practice of the company or as a result of negligence.”

In an interesting twist, the parties first briefed the spoliation issue under federal law. The plaintiff apparently had a change of heart, and (somewhat surprisingly) with defendant’s blessing, opted out of federal common law and chose to brief the spoliation assertion under Colorado state law. [Author’s note: I’m not sure most litigants are free, even by way of stipulation, to so choose or change their choice of applicable law).

With this case on such firm factual footing, let’s go to the analysis:

U.S. Magistrate Judge Boland starts out by noting that the federal district courts in Colorado follow what is best described as “pure” federal common law of spoliation. To that end, Magistrate Judge Boland recounts the standard as followed in the Colorado federal courts. Note that relevancy, rather than control or duty to preserve is not the first element to be analyzed; rather, it is relevancy that is the first precondition to a finding of spoliation. So, if no relevancy, hard stop to any spoliation analysis:

“The legal standard under federal law for imposition of sanctions for spoliation of evidence was succinctly stated by this court in Cache La Poudre Feeds, LLC v. Land O'Lakes, Inc., 244 F.R.D. 614 (D.Colo.2007), as follows:

“The court has inherent power to impose sanctions for the destruction or loss of evidence....In determining whether sanctions are appropriate, the court must first determine whether the missing documents or materials would be relevant to an issue at trial. If not, then the court's analysis stops there. If the missing documents would be relevant, the court must then decide whether [the custodian of the documents] was under an obligation to preserve the records at issue. Finally, if such a duty existed, the court must consider what sanction, if any, is appropriate giving the non-moving party's degree of culpability, the degree of any prejudice to the moving party, and the purpose to be served by exercising the court's power to sanction.”

Similarity of Colorado State and Federal Law Spoliation Standards

Magistrate Judge Boland then discusses the similarity of federal common law and Colorado state law spoliation standards:

“The standard under Colorado law is similar. In Costillo v. Chief Alternative, LLC, 140 P.3d 234 (Colo.App.2006), the court held: Trial courts enjoy broad discretion to impose sanctions for spoliation of evidence....”

“Sanctions may be imposed both to punish a party who has spoiled evidence and to remediate the harm to the injured party from the absence of that evidence....The trial court need not find that the evidence was destroyed in bad faith: it may sanction a party who willfully destroys evidence relevant to a contested issue.”

The Court found that there was no spoliation “under either federal or Colorado law.” This is an interesting statement, since the Court had noted earlier that Colorado federal courts followed federal common law.

Lack of Trigger for Preservation Duty

The Court found that no duty to preserve had been triggered prior to the filing of plaintiff’s action. What ensued appears to be more of an attorney competency issue. In the instant case, the accident in question occurred on May 17, 2005, and on June 1. 2005, plaintiff’s counsel sent a letter of representation (with no preservation language, request, or demand). The Court notes that plaintiff’s counsel letter of representation stated “in its entirety:”

“Please be advised that this firm represents Michael Salvatore in regards to the motorcycle/automobile accident, which occurred on May 17, 2005. Please direct all written and oral communications to this office. Thank you for your time and attention to this matter. Should you have any questions, please do not hesitate to contact this office.”
The Court goes on to note that “[T]he letter did not contain any threat of litigation or indication that litigation was anticipated or imminent.”

Magistrate Judge Boland then describes the ensuing correspondence sent to plaintiff’s counsel “throughout 2006”, all of which received no response:

“In reviewing the file, we note that ... our adjustor[sic] had written to you on several occasions but never received a response. Please advise me if you are still representing Mr. Salvatore. If so [there is a request for information].”

It appears that plaintiff realized that his attorney had been failing to pursue the matter with defendant’s adjustor and retained new counsel in April 2007:

“'On April 23, 2007, the adjustor made a Status Report to the defendants' insurance company, which included the following:

“We have finally heard from the Law Firm representing Mr. Salvatore. Ms. Holland Hoskins is the new attorney assigned to the case. Apparently they have terminated the prior attorney as Ms. Hoskins informed me that they have received a number of calls from her clients who have been waiting for some time to get their cases resolved. She is a bit overwhelmed with the case load but stated that she would get a Settlement Demand Packet out as soon as possible.”

The Court found that the “first threat of litigation, albeit equivocal” was made in November 2007 in connection with successor plaintiff’s counsel’s settlement demand letter.

The Court also found that defendant "knew or reasonably should have known of the likelihood of litigation stemming from this accident on November 1, 2007. They had a duty to preserve evidence based on the possibility of litigation on and after that date."

Of course, the evidence in question had been destroyed long before that date, and so the Court found no spoliation, and basis for the imposition of discovery sanctions.

Blognote: It is quite likely that plaintiff’s first attorney was derelict in his duties of representation. Other cases cited in this digest have held followed the Zubulake doctrine, which applies a “reasonable” standard to percipience of potential evidentiary relevance and an ensuing preservation trigger. U.S. Magistrate Judge Maas of the Southern District of New York issued a recent duty-to-preserve decision with a good Zubulake analysis

““Identifying the boundaries of the duty to preserve [evidence] involves two related inquiries: when does the duty to preserve attach, and what evidence must be preserved.” Zubulake, 220 F.R.D. at 216. A party is obligated to preserve evidence when it “has notice that the evidence is relevant to litigation ... [or] should have known that the evidence may be relevant to future litigation.” Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998) (citations omitted); accord Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d Cir.2001).”

Here, however, it appears that the Court first relies on, and then limits Zubulake “reasonable” language (and Second Circuit decisional authority). It appears that Judge Boland’s decision strains, rather than follows Zubulake.

Blognote: I think the facts of this case stood squarely on the fence, and that another district court might well have found that the series of letters from counsel, although not directly threatening litigation, either individually or when taken constituted an early preservation duty trigger.

Case: Vitelli v. Knudson
Citation: 2009 WL 910846 (Minn. App. 2009)
Date: 2009-04-07
Topics: Spoliation standards under Minnesota common law, clear error review standard for reversal of finding of sufficiency of notice of claim

In this negligence action, the Court of Appeals of Minnesota ruled that defendant builder had reasonable notice of plaintiff homeowners' potential claims and, in accordance with Minnesota common law, was precluded from asserting spoliation as a defense in seeking dismissal of plaintiff’s action. Defendant builder received two letters from plaintiff’s counsel within five weeks of the alleged incident, the latter of which strongly suggested that defendant involve its insurer. Despite notice of plaintiff’s claims, defendant never asked to investigate the premises before the homeowners' complaint was filed.”

The Court first discusses evidentiary spoliation standards under Minnesota common law:

“Spoliation of evidence is the destruction of relevant evidence by a party. Hoffman v. Ford Motor Co., 587 N.W.2d 66, 70 (Minn.App.1998). A district court may sanction a party who destroys evidence if that party gains an evidentiary advantage due to its failure to preserve evidence after having had the opportunity to examine it. Himes v. Woodings-Verona Tool Works, Inc., 565 N.W.2d 469, 470-71 (Minn.App.1997), review denied (Minn. Aug. 26, 1997). The severity of the sanction depends on the prejudice suffered by the opposing party. Hoffman, 587 N.W.2d at 71. But a party can avoid sanctions for spoliation of evidence if the opposing party had sufficient notice of the claim, giving the party the opportunity to correct defects, prepare for negotiation or litigation, or “safeguard against stale claims being asserted after it is too late ... to investigate them.” Id. at 70 (quotation omitted). In the absence of clear error, this court will not reverse a district court's determination of the sufficiency of notice of a claim when deciding whether sanctions are appropriate for the spoliation of evidence. Id. at 71.”

In this case the lower court found that two letters sent by denied a party the use of spoliation as a defense because “reasonable notice” had been given:

“Here, in denying CCH's and Halla's motions for summary judgment, the district court concluded that “because the Court has found that the letter of October 4, 2005, was reasonable notice of the potential claims of the Vitellis, and because [CCH] took no immediate and timely action in response to this notice they cannot rely on the defense of spoliation in this action.””

Notice and Inspection

The Court also ruled that notice and inspection “must be given far enough in advance of the destruction of evidence to provide the alleged responsible party with the opportunity to inspect the evidence.” How this plays out where spoliation of ESI is involved will be interesting.

Case: Mintel Intern. Group, Ltd. v. Neergheen
Citation: 2009 WL 1033357 (N.D. Ill. 2009)
Date: 2009-04-17
Topics: Third party ESI discovery protections, forensic imaging, battle of the experts, timing of assertion of negligent spoliation tort claim, Fed. R. Civ. P. Rule 15(a) motion to amend after Rule 16(b) pleadings amendment deadline requires showing of good cause and due diligence, Seventh Circuit standard for review of Magistrate Judge’s Report and Recommendation

This Illinois Trade Secrets Act (“ITSA”) and Computer Fraud and Abuse Act (“CFAA”) matter comes to us courtesy of the U.S. District Court for the Northern District of Illinois. After plaintiff discovered that that defendant (a former employee of plaintiff) had accepted employment at third-party Datamonitor, plaintiff filed the instant action alleging violations of the ITSA, CFAA, and “violations of various terms of Defendant's employment contract with Mintel.”

In an interesting opening, U.S. District Court Judge Dow explains that even though both the District Court and the Magistrate Judge “rejected all of Plaintiff’s motions concerning the alleged spoliation” the Court was obligated by Seventh Circuit decisional authority to conduct a de novo review of plaintiff’s allegations.

The Court reasoned that hearing the testimony of experts from both sides would be helpful because of “…the complexity of the electronic evidence issues involved in this case.” Moreover, the Court reasoned,

“[T]he Court would find it helpful to understand the experts' views on whether any “files relating to or taken from Mintel” were deleted from that computer and those USB drives, and if so, whether the deletions were accidental or intentional.”

The Court was apparently not very pleased at least one party’s counsel. Let’s tee that up with this “for starters” statement by the Court:

“The Court reiterates (see above) that it would not find expert opinion on legal issues helpful.”

Spoliation, the Tort, vs. Spoliation, the Motion for Sanctions

Illinois recognized an independent action for negligent spoliation of evidence, and Judge Dow first wanted to make clear which type of spoliation proceeding was addressed:

“The Court also stresses (see below) that there is no spoliation “claim” in this case. Rather, there is a request for sanctions and/or an adverse inference based on allegations of spoliation. The kind of testimony from the experts outlined above will be useful in the Court's de novo consideration of the request for sanctions and/or an adverse inference. For all of these reasons, the motion in limine to exclude all evidence or argument regarding allegations of spoliation is denied.”

Ok, so why the to-do about a spoliation claim? Well, it appears that the plaintiff filed a Fed. R. Civ. P. Rule 15(a) motion to amend to include a claim for negligent spoliation of evidence. The alleged spoliation involved ESI:

" Plaintiff contends that its additional claim is appropriate in view of the fact that “[t]he discovery pursued in this matter has revealed that Defendant continued to use his laptop computer, deleted files, and severely limited Mintel's ability to trace Defendant's behavior in the days leading up to and following his resignation from Mintel” and that Plaintiff has not been able to corroborate Defendant's claims that he (i) deleted all of the Mintel confidential information that he took shortly before he left his employment at Mintel and (ii) has not shared that information with his new employer. Plaintiff notes that the issue of spoliation of evidence “has been contested since the beginning of this case and has been the subject of several motions.” According to Plaintiff, that fact cuts in favor of granting the motion for leave to file the new claim, because Defendant ‘can claim no surprise that Mintel is claiming that he spoliated evidence.’"

Post Fed. R. Civ. P. Rule 16(b) Pleading Amendment Deadline Motions to Amend

The problem here is that while plaintiff made a colorably proper motion to amend under Fed. R. Civ. P. Rule 15(a), he did so after the pleadings amendment deadline set forth in the Fed. R. Civ. P. Rule 16(b) case management order, which required a showing of “good cause.” Plaintiff did not move to amend his pleadings under Rule 16(b), and the court more than hints that even if he did, no good cause was shown. For civil procedure aficionados, here are the pertinent rule excerpts:

Rule 16(b)(3)(A):

“Contents of the Order:
(A) Required Contents. The Scheduling Order must limit the time to join other parties, amend the pleadings, complete discovery and file motions.”

Rule 16(b)(4):

“Modifying a Schedule. A schedule may be modified only for good cause and with the judge’s consent.”

Good cause, the Court notes, requires a showing of due diligence in attempting to meet the Rule 16(b) deadline, and Judge Dow makes it clear that plaintiff made no showing of any due diligence and denied plaintiff’s motion to amend:

“Applying the Rule 16(b) standard, the Court cannot find “good cause” for the tardiness in Plaintiff's assertion of a spoliation claim. Again, as Plaintiff acknowledges, “[t]he issue of spoliation of evidence has been contested since the beginning of this case and has been the subject of several motions.” [207, at 2 .] Yet, Plaintiff waited to seek leave to add such a claim until fifty-six days after the deadline for amendments to pleadings established under the scheduling order submitted by agreement of parties at Magistrate Judge Valdez's direction. During that time, Plaintiff focused on the pursuit of sanctions-including the entry of a default judgment-for Defendant's alleged spoliation, without making any effort to plead a claim or cause of action for spoliation. In short, by Plaintiff's own admission, it “was, or should have been aware” of the “facts underlying” the claim prior to the deadline set in the scheduling order. Trustmark Ins. Co., 424 F .3d at 553. Accordingly, the Court cannot find “good cause” to permit the filing of the amended complaint, and Plaintiff's motion for leave to amend its complaint [207] is denied.”

Blognote and Takeaway: This sounds very much like a laches approach and rationale. The rather obvious takeaway is…assert as early as practicable, preferably before the tolling of the Rule 16(b)3(A) bell, and if that’s not possible, make sure your motion to amend is for good cause, and thereby defensible.

Seventh Circuit Standard of Review of Magistrate Judge Order

Plaintiff filed a motion for an order to show cause, for discovery sanctions, and for sanctions resulting from evidence spoliation. Judge Dow referred the motion to a Magistrate Judge, who denied the motion. Plaintiff filed objections, and defendant filed its response. The parties disputed the standard of review for the order denying that motion. The parties’ positions were as follows:

Plaintiff argued for de novo review:

"Plaintiff contends that the order should be reviewed de novo because it sought a final determination of Defendant's alleged violations of the TRO, and thus is akin to a contempt motion or a dispositive sanctions motion that cannot be finally resolved by a magistrate judge. Thus, according to Plaintiff, the Court must treat the January 22, 2009 order as a report and recommendation.

Defendant argued for a “clear error or contrary to law” review:

“Defendant counters that the order pertains to a pre-trial discovery matter and thus is subject to review under the “clearly erroneous or contrary to law” standard.

Of course, defendant hedged its bets:

“Defendant further submits that the order should be upheld regardless of the applicable standard of review.”

The Court ruled that Seventh Circuit decisional authority mandates a de novo review:

"While Defendant's position on the standard of review has some support in the decisions of other circuits cited in Defendant's brief, the Court must conclude that in the Seventh Circuit, the January 22, 2009 order is subject to de novo review, whether the motion that gave rise to the order is viewed as seeking a contempt finding for violation of the TRO, sanctions under Rule 37, or both.“

“It is well established that “Rule 37 permits the award of sanctions with dispositive effects; monetary sanctions, the striking of claims and defenses; and default judgment.” Fidelity Nat'l Title Ins. Co. v. Intercounty Nat'l Title Ins. Co., 2002 WL 1433584, at *2 (N.D.Ill. July 2, 2002).”

“It is equally well established that “[a] magistrate judge is only authorized to make decisions on nondispositive matters that have independent effect in order to assure that he or she does not dispose of the merits of any civil case without the parties' consent.” Royal Maccabees Life Ins. Co. v. Malachinski, 2001 WL 290308, at *6 (N.D.Ill. Mar. 20, 2001).”

So, in the Seventh Circuit, if the request for relief is couched in “sanctions” terminology, the review is always de novo:

“Accordingly, the Seventh Circuit has held that “all sanctions requests, whether pre- or post-dismissal” must be determined de novo by the district court. Retired Chicago Police Ass'n v. City of Chicago, 76 F.3d 856, 869 (7th Cir.1996); see also Alpern v. Lieb, 38 F.3d 933, 935 (7th Cir.1994); Fidelity Nat't Title Ins., 2002 WL 1433584, at *2 (“judges in this district conduct de novo review of magistrate judges' sanctions awards” as well as “a magistrate judge's recommendation on a dispositive motion”); see also Royal Maccabees, 2001 WL 290308, at *7 (same).”

“And “[t]he de novo standard applies to the magistrate judge's findings of fact and conclusions of law.” Fidelity Nat't Title Ins., 2002 WL 1433584, at *2 (citing Rajaratnam v. Moyer, 47 F.3d 922, 924 (7th Cir.1995)). "

Magistrate Judge’s Order Viewed as “Report and Recommendation” Subject to De Novo Review

Accordingly, the Court was constrained to view the Magistrate Judge’s Order as a “Report and Recommendation” subject to de novo review. The Court then describes next steps in a de novo review:

"Under [the de novo review] standard, this Court must give “fresh consideration to those issues to which specific objections have been made.” Rajaratnam v. Moyer, 47 F .3d 922, 925 n. 8 (7th Cir.1995).

The Court notes that where a de novo review involves complex issues about electronic discovery, that expert testimony is warranted. Moreover, the Court now fully explains that issues of spoliation relate to a motion for sanctions, rather than an independent tort claim for spoliation of electronic evidence:

“And, in view of both the applicable standard of review and the complexity of the electronic discovery issues raised in the expert reports and affidavits, the Court concludes that going forward with “Phase II” proceedings in which the experts present their testimony in court, subject to cross-examination, will best position the Court to make an informed de novo ruling on Plaintiff's sanctions motion. See Fed.R.Civ.P. 72(b) (“The district court may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instructions”); 28 U.S.C. § 636(b)(1)(C) (noting that on de novo review, the district judge may “receive further evidence”).”

“Accordingly, the Court reserves ruling on Plaintiff's objections to the January 22, 2009 order until after it has heard testimony from the experts, after which time the Court will issue a written ruling on whether any basis exists for sanctions and/or an adverse inference on the basis of the alleged spoliation."

Third Party eDiscovery

Plaintiff sought to discover ESI from third party (and defendant’s current employer) Datamonitor. The discovery process was contentious, involving multiple subpoenas seeking forensic images, motions to compel, and motions for reconsideration, in pertinent part seeking:

“[A] forensic image of Datamonitor's desktop and/or laptop computers used at any time by Defendant and the forensic image of Defendant's electronic mail account at Datamonitor,” or, at a minimum, a “Round 1-style” report FN3 of the forensic images of those Datamonitor computers.”

Ok, here now, the definition of “Round 1-style” report:

“FN3. A Round 1-style report is generated from an existing forensic image of a computer and contains “metadata”-information generated by the software in the computer. According to Plaintiff, it would include the following registers and logs: All Files Present; Event Logs; Internet History (excluding the substance of any queries or searches input by Datamonitor personnel); Link File Reports; Recycle Bin; System Information; and USBSTOR Registries/Logs.”

Put succinctly, plaintiff’s third party eDiscovery attempts (and five discovery motions) could be characterized as alternatively Herculean, or needlessly repetitive, generally unsubstantiated, and therefore unjustified. Guess which way the Magistrate Judge Ruled on plaintiff’s five (count ‘em) discovery motions? Denied, but with some concessions to plaintiff’s “concerns.”
Seventh Circuit Standards for Review of Magistrate Judge’s Non-Dispositive Ruling

The rule in the Seventh Circuit is the standard of review for an objected-to non-dispositive ruling of a Magistrate Judge is clear error or contrary to law:

“As both parties have recognized, where, as here, a district court considers objections to a magistrate judge's rulings on nondispositive matters, the magistrate judge's disposition will be set aside only if it is “clearly erroneous or contrary to law.” Fed.R.Civ.P. 72(a); see also Hall v. Norfolk Southern Ry. Co., 469 F.3d 590, 595 (7th Cir.2006); Bobkoski v. Board of Educ. of Cary Consol. School Dist., 141 F.R.D. 88, 90 (N.D.Ill.1992). Under the clear error standard of review, “the district court can overturn the magistrate judge's ruling only if the district court is left with the definite and firm conviction that a mistake has been made.” Weeks v. Samsung Heavy Industries Co., Ltd., 126 F.3d 926, 943 (7th Cir.1997)."

Third Party Discovery Requests

Having teed up the standard for review, Judge Dow then notes that third parties are entitled to somewhat greater protection than parties from discovery requests, and that some showing beyond mere speculation is required to permit full bore type discovery:

“As Judge Valdez repeatedly has noted, third parties are entitled to somewhat greater protection than parties in regard to discovery requests (see Builders Ass'n of Greater Chicago v. City of Chicago, 2001 WL 664453, at *7 n. 4 (N.D. Ill. June 12, 2001)), such as requests for a forensic image of a competitor's computers (see, e.g., Powers v. Thomas M. Cooley Law School, 2006 WL 2711512, at *5 (W.D.Mich. Sept. 21, 2006)).

“Moreover, the pertinent rules of civil procedure generally do not permit the requesting party to conduct the actual search for discoverable data (In re Ford Motor Co., 345 F.3d 1315, 1317 (11th Cir.2003)), at least absent some showing that the documents sought by the requesting party are or were in the possession of the party to whom the request is made (see, e.g., Hagenbuch v. 3B6 Sistemi Elettronici Industriali S.R.L., 2006 WL 665005, at *4 (N.D.Ill. March 9, 2006)).”

"Upon review of Plaintiff's motions, the parties' briefs and arguments, and Judge Valdez's two orders, the Court concludes that Judge Valdez considered all of the evidence presented by Plaintiff, applied the appropriate rules and case authorities, and offered a more than reasonable justification for her ruling that Plaintiff had not come forward with sufficient information to get “beyond the mere speculation line and towards the standard required for discovery from a third-party.”"

Finding no clear error in the Magistrate Judge’s ruling, the District Court affirmed.

This decision also has an interesting “battle of the experts” discussion in connection with data wiping. Plaintiff alleged that certain USB devices were “wiped.” Judge Dow provides an interesting analysis. Look for the “some evidence of no intentional wiping” language:

“Magistrate Judge Valdez had before her the contradicting opinions of two forensic experts regarding the hexadecimal value “FF” found on the unallocated space of both drives. After wading through, and then setting forth, the testimony of the two experts, Judge Valdez concluded that Plaintiff's motion to reconsider presented a classic “battle of the experts.” [219, at 10.]

“She found it important that Plaintiff's expert found no traces of a wiping program on the USB drives apart from the presence of the “FF” pattern and that he did not state that he was familiar with any wiping program that leaves an “FF” hexadecimal pattern.”

“She compared that testimony with the explanation of Defendant's expert for the “FF” pattern in the absence of any other evidence of wiping and concluded that it was “reasonable” to assume that no wiping program was ever run. In addition, Magistrate Judge Valdez reasonably concluded that the fact that two Mintel-related documents-neither of which has been shown to have been transferred to any Datamonitor device-actually remained on the USB devices provided some evidence that there was no intentional “wiping” of the device. Id. (citing Bryant v. Gardner, 2008 WL 4966589, at *15 (N.D.Ill.2008) (“Had Defendants purposefully deleted unfavorable evidence from the laptop, the Court finds it unlikely that [ ] other documents favorable to Plaintiff would have remained”)). "

Blognote: It appears that Datamonitor’s status in this action might more appropriately be described as a non-party rather than a “third party.” While no specific mention of Fed. R. Civ. P. Rule 45 is made in the opinion, the Court discusses a subpoena and motion to compel Datamonitor’s compliance both with a subpoena and a court order directing compliance therewith.


Tuesday, April 28, 2009

2009-04-28 Spoliation, ESI Authentication, and Standards of Review for Federal Magistrate Judge Report and Recommendations

Five decisions for this week’s digest (and yes, I’m catching up after RSA 2009). The first, a duty to preserve decision. The second decision reminds us that eDiscovery abuse sanctions can survive summary judgment, and is followed by a two authentication cases (one of which is a criminal matter, but each of which pays some degree of homage to Magistrate Judge Grimm’s decision in Lorraine v Markel American Ins.), and a decision discussing the standards of a federal district court’s review of a U.S. Magistrate’s Report and Recommendation.

Duty to Preserve: The Southern District of New York provides a decision in which negligent failure to preserve (triggering potential spoliation proceedings) was not established. The court also provides a discussion of how, and under what circumstances [in the Second Circuit], a finding of spoliation can support a denial of summary judgment decision in “borderline” cases. In the Adorno decision, below, it did.
Sanctions for Spoliation Survive Summary: Nicely alliterative. Where would we be in a week without a spoliation decisions? Here, from the District of Nevada, a decision involving spoliation by a plaintiff.
ESI Authentication: ESI Authentication decisions are beginning to crop up. Discussed are two decisions; the first providing Indiana decisional authority on the authentication of cell phone text messages, and the second from the Northern District of Ohio on authentication of web page printouts.
Standard of Review for Magistrate Judge Report and Recommendation: For civil procedure fans, a decision from the Northern District of New York outlining the standard of review for objected-to and unobjected-to report and recommendation(s)s from a United States Magistrate Judge. More on review standards in upcoming digests.



Adorno v. Port Authority of New York and New Jersey, 2009 WL 857495 (S.D.N.Y. 2009)
Coburn v. PN II, Inc., 2009 WL 905057 (D.Nev. 2009)
Hape v. State, --- N.E.2d ----, 2009 WL 866857 (Ind.App. 2009)
Schneider Saddlery Co., Inc. v. Best Shot Pet Products Intern., LLC, 2009 WL 864072 (N.D.Ohio 2009)
Gaffield v. Wal-Mart Stores East, LP, 2009 WL 890654 (N.D.N.Y. 2009)

Case: Adorno v. Port Authority of New York and New Jersey

Citation: 2009 WL 857495 (S.D.N.Y. 2009)
Date: 2009-03-31
Topics: Second Circuit spoliation requirements, negligent failure to preserve evidence, EEOC filing as preservation duty trigger, extrinsic evidence required to show prejudice in “mere negligence” spoliation cases, negligent spoliation may provide basis for denial of summary judgment

In this Title VII Civil Rights action (42 USC §§1981, 1983), U.S. District Court Denny Chin rules on plaintiff’' sanctions motion under Fed. R. Civ. P. Rule 37. Keep in mind that sanctions motions under Rule 37 first require that a discovery order (compelling production) be granted, and that a violation of that order has been alleged. That said, a spoliation proceeding may be conducted sua sponte by the court under its inherent powers.

In this action, what had been destroyed were handwritten documents, but the Court’s analysis clearly pertains equally to ESI, relies on Zubulake IV (an ESI preservation decision) and so is worthy of some discussion. The Court’s begins with a review of the Second Circuit spoliation analysis. Note the distinction between elements establishment and the sanctions imposition analyses:

Spoliation of Evidence

Judge Chin first discusses the elements comprising spoliation in the Second Circuit:

“’Spoliation of evidence is defined as “the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” Byrnie, 243 F.3d at 107 (citing West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999)). When one party alters, destroys, or otherwise fails to preserve key evidence before it can be examined by another party, a court may, pursuant to Fed.R.Civ.P. 37(d) or its inherent power, impose sanctions on the party responsible for the spoliation of evidence. See West, 167 F.3d at 779. The party seeking sanctions bears the burden of establishing all elements of a claim for spoliation of evidence. Byrnie, 243 F.3d at 109.’”

Judge Chin then provides an analysis of the four factors to be taken into account by a court in its determinations. In reality there are five factors. Note the careful wording of the excerpt from Byrnie cited by the Court, which makes control over evidence a pre-requisite to a finding of an affirmative duty to preserve. Although the Court numbers these factors as four, in reality there are five, and each element will be discussed under separate caption.

I. Control

“In assessing whether sanctions are warranted for the spoliation of evidence, the court first must determine whether the party with control of the evidence was under an affirmative duty to preserve the evidence. Id. at 107. “

II. Duty to Preserve

“While a litigant is under no duty to keep or retain every document in its possession, “[o]nce a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y.2003) (“Zubulake IV”).

III. Relevance

“Relevant documents are those that a party should reasonably know are “relevant in the action, [ ] reasonably calculated to lead to the discovery of admissible evidence, [ ] reasonably likely to be requested during discovery and/or [are] the subject of a pending discovery request.” Id. at 217 (quoting Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 72 (S.D.N.Y.1991)). The duty to preserve extends to those employees of a party who are likely to have relevant information. Zubulake IV, 220 F.R.D. at 218.

For those practitioners who litigate Title VII matters, the duty to preserve is enhanced by the CFR:

“Under EEOC regulations, moreover, employers are required to preserve personnel documents relevant to a pending EEOC charge until final disposition. 29 C.F.R. § 1602.14. These include “personnel or employment records relating to the aggrieved person and to all other employees holding positions similar to that held or sought…””

IV. Culpable State of Mind

Ok, maybe I’m not a math wizard, but the factors articulated by the Second Circuit add up to…5. I counted them myself. That said, the Court cites Second Circuit language in numbering this consideration “second”:

“Second, the party seeking sanctions must show that the party with control over the evidence had a “culpable state of mind.” Byrnie, 243 F.3d at 109. Spoliation sanctions are not limited to cases where the evidence was destroyed willfully or in bad faith, but may also be imposed when a party negligently loses or destroys evidence. See Zubulake IV, 220 F.R.D. at 220.”

V. Relevance

Really, really, there are 5, not three requirements. The Second Circuit might describe three, but I’ll stick with my arithmetic.

“Third, the party seeking sanctions must show that the spoliated evidence was relevant to its claims or defenses, such that a reasonable trier of fact could find that it would support those claims or defenses. See Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 108-09 (2d Cir.2002); see also Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 431 ( “Zubulake V” ) (“[T]he concept of relevance encompasses not only the ordinary meaning of the term, but also that the destroyed evidence would have been favorable to the movant.”); Treppel v. Biovail Corp., 249 F.R.D. 111, 121-22 (S.D.N.Y.2008).”

Let’s parse the term “relevance.” It consists of two discrete requirements. The first addresses the requirement that spoliated evidence might support a claim or defense of a non-spoliator. The second addresses the requirement that the spoliation of evidence must somehow prejudice the non-spoliating party. On April 22, 2009, I participated in a mock digital evidence spoliation proceeding at the RSA Security Conference in San Francisco before Magistrate Judge John Facciola (D.D.C.) and argued in favor of the affirmance imposition of sanctions for spoliation in a follow on mock appeals session (Second Circuit decisional authority was controlling) before Judges Shira Scheindlin (SDNY) of Zubulake fame, and San Francisco Superior Court Judge Richard A. Kramer. Both Magistrate Judge Facciola’s decision imposing sanctions, and Judge Scheindlin’s and Kramer’s reversal of M.J. Facciola’s decision involved extensive discourse on the issue of prejudice.

So, when arguing relevance, a spoliation movant should also always demonstrate prejudice.

VI. Sanctions Imposition Discretionary with Court

This is really not a demonstration required to establish spoliation sanctions, but guidance (or license) to a District Court to determine sanctions imposition on a case-by-case basis. I’ll stick with five factors, and pass the bottle of aspirin:

“Finally, determining the proper sanction to impose for spoliation “is confined to the sound discretion of the trial judge, ... and is assessed on a case-by-case basis.” Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 436 (2d Cir.2001). Sanctions should be designed to “(1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party.” West, 167 F.3d at 779 (citations and internal quotation marks omitted); see also Treppel, 249 F.R.D. at 123-24.”

EEOC Filing Triggers Preservation Duty

Just in case there is any doubt, the filing of an EEOC action does indeed trigger a duty to preserve, and the duty in turn to preserve relevant personnel documents is codified in the CFR:

“With the filing of the Asian Jade Society's EEOC charge, the Port Authority had reason to anticipate litigation and was under an obligation to “put in place a litigation hold” extending to email as well as paper documents relevant to the charge. Zubulake IV, 220 F.R.D. at 216-18. Personnel documents relevant to the Asian Jade Society charge included documents also sought by plaintiffs as relevant to this action, such as the Handwrittens, CO recommendations, and other documents related to promotions. See 29 C.F.R. § 1602.14.”

That said, the Court in this instance discusses that, under the circumstances of this case, a mere “meeting” about promotions did not result in an earlier than EEOC filing date preservation trigger:

“Plaintiffs claim the Port Authority should have reasonably anticipated this litigation in 2003, following a series of meetings between Department leadership and the Hispanic Police Society about promotion of Hispanic officers. (Pls. Mem. at 11). I am not persuaded that such meetings prompted the Port Authority to reasonably anticipate litigation.”

The Court goes on to find that the destruction of documents by the defendant was “at least negligent” under Zubulake IV, but as there was no showing of a “wholesale failure” by defendant to put in place a litigation hold, there was insufficient evidence for the Court to make a finding of “gross negligence”:

“Second, I conclude the Port Authority's failure to preserve documents relevant to this litigation was at worst negligent. See Zubulake IV, 220 F.R.D. at 220 (“Once the duty to preserve attaches, any destruction of documents is, at a minimum, negligent.”). The Port Authority does not dispute that it failed to retain at least some of the documents at issue here. I am not convinced, however, that plaintiffs have shown a wholesale failure by the Port Authority to put in place a “litigation hold” or otherwise communicate document preservation or destruction policies to its employees, such that a finding of gross negligence by defendant would be appropriate. Cf. Heng Chan v. Triple 8 Palace, No. 03 Civ. 6048(GEL)(JCF), 2005 WL 1925579, at *7 (S.D.N .Y. August 11, 2005) (finding gross negligence where defendant “systematically destroyed evidence because they had never been informed of their obligation to suspend normal document destruction policies”).”

“Th[e] evidence alone is insufficient to demonstrate the lack of any such policies; I decline to draw such a conclusion here. Nor is there anything in the record to suggest that the Port Authority acted willfully or with the intent to destroy evidence that it believed would be adverse to its interests. Indeed, as Judge Cedarbaum noted in the Asian Jade Society case, the Port Authority's failure to preserve personnel materials is no doubt related in part to the attack on the World Trade Center on September 11, 2001, “which destroyed the Port Authority's executive offices and killed many of its employees.” Port Authority Police Asian Jade Society of New York & New Jersey, No. 05 Civ. 3835(MGC), 2009 WL 577665, at *2 (S.D.N.Y. Mar. 5, 2009).”

“Arguable” Relevance

Judge Chin then notes that “some” of the categories of the documents in question were arguably relevant:

“Third, of the five categories of documents that are the subject of this motion, some have arguable relevance. The Handwrittens for the Detective promotions, for example, would help establish the size of the applicant pool and identify the applicants. The Rivera Memorandum, as described by plaintiffs, arguably provides support for both the discrimination and retaliation claims. The CO recommendations are arguably relevant because they could shed light on the qualifications of both successful and unsuccessful candidates.”

Lack of Prejudice

What sunk (technical term of art, folks) plaintiffs’ motion for spoliation was a finding by the Court that on the basis of the record before it, there was no prejudice to the non-spoliating party:

“Ultimately, however, the request for sanctions is denied, for I am simply not persuaded on this record that a reasonable jury could find that the evidence was harmful to the Port Authority's defense of the case. Indeed, this was precisely Judge Cedarbaum's conclusion in denying the motion for sanctions in the Asian Jade Society case. See 2009 WL 577665, at *2.”

Extrinsic Evidence Needed to Show Prejudice in “Ordinary Negligence” Spoliation

Following Southern District precedent, Judge Chin denies the motion for spoliation, ruling that a finding of prejudice must be predicated on some extrinsic evidence where spoliation results from “ordinary” or “mere” negligence:

“Although “the burden placed on the moving party to show that the lost evidence would have been favorable to it ought not be too onerous,” Heng Chan, 2005 WL 1925579, at *7, when “the culpable party was negligent, there must be extrinsic evidence to demonstrate that the destroyed evidence was relevant and would have been unfavorable to the destroying party,” Great Northern Ins. Co. v. Power Cooling, Inc., No. 06 Civ. 874(ERK)(KAM), 2007 WL 2687666, at *11 (E.D.N.Y. Sept. 10, 2007) (citation omitted)."

Blognote: A duty to preserve may be bilateral, and apply to both plaintiff and defendant. It appears that the court would entertain an argument to the effect that a duty to preserve may be waived (or extinguished) where both parties are in possession of, and where both do not retain, a relevant document. In this case, one plaintiff did not retain a copy of a memorandum also not retained by defendant. While not made the sole basis for the denial of the motion, this certainly had some impact on the Court’s decision:

“Moreover, Rivera himself did not keep a copy of the memorandum, and thus he can hardly complain that the Port Authority did not retain one.”

Negligent Spoliation Supports Denial of Summary Judgment

The Court also notes that in the Second Circuit, a motion for summary judgment may be defeated in certain circumstances where spoliation has occurred:

“Because “[i]n borderline cases, an inference of spoliation, in combination with ‘some (not insubstantial) evidence’ for the plaintiff's cause of action, can allow the plaintiff to survive summary judgment,” Byrnie v. Town of Cromwell, Bd of Educ., 243 F.3d 93, 107 (2d Cir.2001)

This appears to be one of the first decisions in which negligent spoliation is found, sanctions are denied, but where the spoliation itself is used as the basis for denial of a summary judgment motion. It appears that the “borderline” here was crossed (and summary judgment denied) on the discrimination and retaliation claims. Keep in mind that although the “Rivera Memorandum” was one of the documents destroyed by defendants, there was some extrinsic evidence (testimony) as to the content of that memorandum:

“The Rivera Memorandum, as described by plaintiffs, arguably provides support for both the discrimination and retaliation claims.”

Case: Coburn v. PN II, Inc.

Citation: 2009 WL 905057 (D. Nev. 2009)
Date: 2009-03-31
Topics: Spoliation proceedings survive grant of summary judgment; motion to dismiss for destruction of evidence

In another Title VII case alleging disparate treatment, this time before U.S. District Judge Dawson of the District of Nevada, defendant filed a “Motion to Dismiss for Destruction of Evidence.” In that motion, defendant alleged that plaintiff “manually deleted almost 4,000 files containing relevant search terms before her computer hard drive was cloned for examination.”

Ok, this case just graduated into the “what-not-to-do” hall of fame. The envelope, please:

“When the forensics examiners recovered those portions of the deleted files that had not yet been permanently overwritten with other data, Plaintiff refused to produce them to Defendants.”

“Plaintiff ran a “cleaner” program that systematically destroyed certain documents from her computer just two days before the court-ordered production.”

“Plaintiff asserts that such activities were automatic or part of scheduled service…”

Nice try, but the court wasn’t buying:

“[H]owever, this explanation is contradicted by her own technician who claims that he did not set the program to automatically remove user created data files. The computer settings were manually altered on July 21, 2007, and again on May 7, 2008 at 8:15 p.m. according to Vestige, the court appointed forensics examiner assigned to examine Plaintiff's computer. As stated, Plaintiff was under a court order to allow a forensics examination of the computer two days later.”

Judge Dawson granted defendant’s motion for summary judgment on bases other than spoliation, but noted first that had summary judgment been denied, there would have been an evidentiary hearing on the spoliation motion, leaving little doubt what would have ensued. The Court also left open the door for a subsequent sanctions motion:

“The foregoing allegations are sufficient that the Court would have held an evidentiary hearing were summary judgment not to be granted. Such a hearing may still be necessary in the event attorney fees or sanctions become an issue. For present purposes, the Court denies the Motion to Dismiss as moot, but without prejudice to renewal on proper showing.”

Case: Hape v. State

Citation: --- N.E.2d ----, 2009 WL 866857 (Ind. App. 2009)
Date: 2009-03-31
Topics: Text messages in cell phone held not testimonial, no confrontation clause violation, text messages must be separately authenticated, presentation of text messages to jury without proper authentication no fundamental error

In this decision from the Court of Appeals of Indiana, the Court held that text messages saved in defendant’s cell phone were “part and parcel” of the telephone in which they were stored, “just as the pages in a book belonged to the book by their very nature” and accordingly, like the telephone itself, not impeachable.

Of course, the argument might have been made that text messages are not “part and parcel” of a phone that, unlike “pages in a book” text messages might be easily and undetectably inserted or deleted, but it wasn't. I suspect this criminal matter represents a clear case of what Magistrate Judge Facciola commonly refers to as "asymmetric litigation." There was no objection raised at trial regarding the introduction of defendant’s cell phone or the messages contained in it, leaving the Court of Appeals free to review for “fundamental error” (which I presume presents a very high bar). Quite possibly it was either lack of defendant's resources or counsel competency (compared with the State's resources and competency) that often characterizes criminal proceedings as "asymmetric" in nature.

The issue presented for review: Whether the text messages represented “testimonial hearsay.” If so, the defendant asserted, he should have been provided with the opportunity to cross examine that hearsay.

A little constitutional law review is appropriate. The Sixth Amendment’s right to witness confrontation extends to the states courtesy of the Fourteenth Amendment. So, in a state law criminal action, a defendant is afforded the same Sixth Amendment right of confrontation as is afforded a defendant in a federal criminal proceeding. ‘Nuff said.

Ok, back to the decision. The defendant was arrested and removed from his truck, which contained bags of methamphetamine, some cash, two cellular telephones, a box of plastic bags, and implements of methamphetamine production. The arresting officers also found bags containing methamphetamine in defendant’s pocket.

It was discovered after the trial (and after defendant’s conviction) that during deliberation, the jurors were able to retrieve text messages from defendant’s cell phone by turning it on (it appears that the arresting officers never turned on the phone, or had it forensically examined). The message on the phone from one “Brett”:

“Hey man do you think that you can do something 4 one of what I gave you the other night. I could care less about ours right now but my other dude keeps asking & I don't even have the funds to pay him back guess I will freakin tell him to get it off the water tower.”

“Accidental Exposure” of Text Messages Saved On Cell Phone to Jury

We get a sense of where the court is headed by its use of the term “accidental exposure.” On appeal, the Court notes, defendant:

“…alleges that the accidental introduction of the text messages violated the Confrontation Clause, Indiana hearsay rules, and the requirement that evidence be properly authenticated before admission.”

Cell Phone Text Messages are “Intrinsic” to a Cell Phone

Indiana decisional authority provides that “as a general matter, a jury’s verdict may not be impeached by evidence from the jurors who returned it. Stephenson v Sate, 742 N.E. 3d 463, 277 (Ind. 2001). Indiana decisional authority has drawn a distinction however, between the types of evidence from a juror, labeling them either “intrinsic” or “extrinsic”:

“However, “extrinsic or extraneous material brought into deliberation may be grounds for impeaching a verdict where there is a substantial possibility that such extrinsic material prejudiced the verdict.” Id. The burden rests with the defendant to prove that material brought into the jury room was extrinsic. Id. The burden then shifts to the State to prove the introduction of extrinsic material harmless. Id. Absent a “substantial possibility that [the] ... material prejudiced the verdict,” its introduction is harmless, and jurors may not impeach the verdict by testifying about it. Id.”

The Court then notes that the evidence was admitted without objection. Another telltale sign of asymmetric litigation:

“The jury discovered the text messages at issue by turning on a cellular telephone that was admitted into evidence without objection.

Extrajudicial Jury Experimentation

The Court of Appeals then analyzes “extrajudicial” jury experimentation resulting in jury possession of extrinsic evidence and acknowledges its impermissibility:

“In Bradford v. State, our Supreme Court addressed a defendant's claim that jurors improperly obtained and considered extraneous evidence by conducting extrajudicial experiments. The Court cited with approval the rule that experiments conducted by the jury improperly inject extraneous information into deliberations when the results “amount[ ] to additional evidence supplementary to that introduced during the trial.”*988 Bradford v. State, 675 N.E.2d 296, 304 (Ind.1996) (quotation omitted), reh'g denied; Kennedy v. State, 578 N.E.2d 633, 641 (Ind.1991) (citing In re Beverly Hills Fire Litig., 695 F.2d 207 (6th Cir.1982)).

With that analysis out of the way, the Court then makes the quantum leap of logic in deciding that there was not extrajudicial experiment because there was no “extrinsic” evidence provided to the jury. The reason: text messages are “intrinsic” to a cellular telephone. Support for that proposition? Black’s Law Dictionary:

“Here, turning on the telephone did not constitute an extrajudicial experiment that impermissibly exposed the jury to extraneous information. First, the text messages themselves are not extraneous to the cellular telephone. We agree with the State that text messages are intrinsic to the cellular telephones in which they are stored. “Intrinsic,” as defined by Black's Law Dictionary, means “[b]elonging to a thing by its very nature; not dependent on external circumstances; inherent; essential.” Black's Law Dictionary 842 (8th ed.2004). We conclude that the text messages at issue here are part and parcel of the cellular telephone in which they were stored, just as pages in a book belong to the book by their very nature, and thus they are intrinsic to the telephone.”

The Court then in this portion of its decision (and purely imo) blithely ignores the fact that a cell phone is a computing device, and the very act of turning it off and on may have severe evidentiary consequences.

“Turning on a device that is made to be turned on constitutes a permissible examination of the evidence before the jury. Pursuant to Indiana Evidence Rule 606(b), Hape may not impeach the jury's verdict with affidavits regarding the text messages. The trial court did not abuse its discretion in denying Hape's motion to poll the jury.”

Since a cell phone is a computing device, text messaging is accomplished through the use of an application running on a cell phone. Moreover, since a text message is sent to a phone (rather than being part and parcel of same) a cogent argument might have been made that the text message was extrinsic evidence. No such argument appears to have been made by defendant.

Fundamental Error

Defendant also argued that the introduction of the text messages violated his Sixth Amendment right of confrontation, that the text messages constituted inadmissible hearsay, and that they were not properly authenticated. Since no objections on these bases were raised at the trial level, the Court was constrained to review only for fundamental error. Counsel competency (or resources) must have been a factor, but this was not discussed. How high is the bar for reversal based on fundamental error? Very:

“We will only find fundamental error “when the record reveals a clearly blatant violation of basic and elementary principles, where the harm or potential for harm cannot be denied, and [where the] violation is so prejudicial to the rights of the defendant as to make a fair trial impossible.” Jewell v. State, 887 N.E.2d 939, 942 (Ind.2008). “In determining whether a claimed error denies the defendant a fair trial, we consider whether the resulting harm or potential for harm is substantial.” Townsend v. State, 632 N.E.2d 727, 730 (Ind.1994). “The element of harm is not shown by the fact that a defendant was ultimately convicted; rather, it depends upon whether his right to a fair trial was detrimentally affected by the denial of procedural opportunities for the ascertainment of truth to which he otherwise would have been entitled.” Id.”

Ok, on to the arguments.

Confrontation Clause

I expect that Confrontation Clause assertions involving ESI will become quite frequent in the not-too-distant future. Unfortunately, where asymmetrical litigation finds a defendant with limited legal and technical resources, such assertions are likely to fail. When it comes to digital evidence and criminal proceedings, poor defendants are almost guaranteed to make bad law, and imo, this decision stands at that vanguard.

The Court of Appeals first makes its Confrontation Clause analysis, and not surprisingly, winds up with a discussion of the Supreme Court’s 2004 decision in Crawford v Washington:

“"The Sixth Amendment to the United States Constitution provides: “In all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him....” This right of confrontation is applicable to the states through the Fourteenth Amendment. Pointer v. Texas, 380 U.S. 400, 406, 85 S.Ct. 1065, 13 L.Ed.2d 923 (1965); *989 Howard v. State, 853 N.E.2d 461, 464 (Ind.2006). The essential purpose of the Sixth Amendment's “Confrontation Clause” is to ensure that the defendant has the opportunity to cross-examine the witnesses against him or her. Howard, 853 N.E.2d at 465. The Supreme Court has held that “the admission of a hearsay statement made by a declarant who does not testify at trial violates the Sixth Amendment if (1) the statement was testimonial and (2) the declarant is unavailable and the defendant lacked a prior opportunity for cross-examination.” Id. (citing Crawford v. Washington, 541 U.S. 36, 68, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004)). As the Indiana Supreme Court has explained, “A critical portion of the [ Crawford] Court's holding was the phrase ‘testimonial evidence.’ ” Id.

The Court then applies the Indiana definition of what is “testimonial evidence.” This appears to be somewhat broader in definition than that given to the phrase by the Supreme Court:

Evidence is testimonial if it “is one given or taken in significant part for purposes of preserving it for potential future use in legal proceedings.” Frye v. State, 850 N.E.2d 951, 955 (Ind.Ct.App.2006), trans. denied."”

The Court of Appeals nevertheless rules that cell phone text messages are not testimonial for two reasons: First, there was no evidence that the messages were made by “Brett” (the sender of the text messages) with any intention that they be used in future legal proceedings, and second, that the defendant (recipient of the statements) did not collect them for the purposes of any future legal utility.

Accordingly the Court ruled that “[T]he Confrontation Clause does not act to bar these text messages because they are not testimonial.”

That was clear. Maybe.


The Court of Appeals next discusses defendant’s assertions that the cell phones and the text messages were not properly authenticated, and that their admission constituted fundamental error. The Court first addresses the authentication of the cell phone, and after describing the acquisition and chain of custody, rules that they were properly authenticated.

Separate Authentication of Cell Phone Text Messages

The Court then addresses the authentication of the text messages, and notes that it has “unearthed” no Indiana authority “involving discussion of authentication of text messages generated and stored in telephones.”

The Court first pays homage to the decisional authority requiring that computer data be authenticated, and that such authentication under the Indiana Evidence Rule 901(a) is “satisfied by a showing that [data] was recovered from [the defendant’s] computer. Bone v. State, 771 N.E. 2d at 716. “ [Complete citation added]

Separate Purpose, Separate Authentication

Relying in part on Magistrate Judge Grimm’s decision in Lorraine v Markel American Ins. Co, the Court then finds that a text message, even if “intrinsic” to a cell phone, must be separately authenticated where the purpose for which admission is sought is differs from the purpose of admitting the phone itself.

“Even though we have determined that a text message stored in a cellular telephone is intrinsic to the telephone, a proponent may offer the substance of the text message for an evidentiary purpose unique from the purpose served by the telephone itself. Rather, in such cases, the text message must be separately authenticated pursuant to Indiana Evidence Rule 901(a). See also Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 546 (D.Md.2007) (observing that federal courts have recognized Federal Rule of Evidence 901(b)(4) as a means to authenticate electronic data, including text messages); Dickens v. State, 175 Md.App. 231, 927 A.2d 32, 37 (2007) (reviewing whether text messages saved on a cellular telephone were properly authenticated); *991 State v. Taylor, 178 N.C.App. 395, 632 S.E.2d 218, 230-31 (2006) (reviewing whether the State properly authenticated text messages).”

In what may best be described as an intriguing exercise in logic, the Court finds that the State did not admit the text messages for an evidentiary purpose distinct from the cell phone (indeed, the State appears to have been unaware of the text messages) and so they could not have been offered for any reason other than that defendant possessed them in the same way he possessed the cell phone. This provided sufficient cover for the Court’s next quantum leap in logic:

“Nevertheless, the presentation of the text messages to the jury without proper authentication did not rise to the level of fundamental error because the jury's exposure to the text messages was harmless error. See Stephenson, 742 N.E.2d at 477.”

The Court’s ultimate reasoning was that the other evidence against the defendant was strong enough to overshadow any potential prejudice presented by the jury’s exposure to the text messages:

“Unlike cases in which the appellate court has reversed convictions after evidence was accidentally provided to a jury because the evidence against the defendant is otherwise circumstantial, Franklin v. State, 533 N.E.2d 1195, 1196 (Ind.1989); Schlabach v. State, 842 N.E.2d 411, 416-17 (Ind.Ct.App.2006), trans. denied, here the evidence against Hape is strong. Having reviewed the evidence presented to the jury, we conclude that there is not a substantial possibility that the text messages prejudiced the verdict. See Stephenson, 742 N.E.2d at 477. The evidence against Hape with regard to possessing methamphetamine with the intent to deliver was compelling.”

While this no doubt was true, the Court might have avoided eviscerating technological definitions along the way. It didn’t and we’ll have to see what reliance is made on this decision in future actions.

Some additional observations: It is surprising that a forensic examination of the phone did not take place. One might also have made the argument that the cell phone itself was spoliated by the very fact of turning it on and viewing the text message. Chalk this up to the dangers of asymmetric litigation and what is in all likelihood an overworked and undertrained (in matters technological) public defender

A final observation: If a text message is “intrinsic” to a cell phone, must other computer data be considered “intrinsic” to a particular computer? Think, inter alia, about “cloud computing”

Case: Schneider Saddlery Co., Inc. v. Best Shot Pet Products Intern., LLC,

Citation: 2009 WL 864072 (N.D.Ohio 2009)
Date: 2009-03-31
Topics: Authentication of web content, trademark decisional authority and judicial notice under Fed.R. Evid. 202(b)(2)

In this trademark infringement case from the U.S. District Court for the Northern District of Ohio, District Judge Kathleen O’Malley addresses the authentication of web content.

Judge O’Malley first rules that although unauthenticated printouts of web site content are normally inadmissible, an exception lies in trademark dispute, a court may take judicial notice of images that are the subject of the dispute, and if they are not objected to as inaccurate:

“Best Shot has attached a number of unauthenticated photographs to its motions, most of which are printed directly from the parties' web-sites. ( See, e.g., Doc. 74 Ex. I.) Courts are usually hesitant to accept any unauthenticated material for purposes of summary judgment, but here, the images of Best Shot's and Schneider's products are admissible. In a trademark dispute, a court may choose to take judicial notice of the very images that are the subject of the dispute, so long as there is no contention by either party that the images are inaccurate or could not be properly admitted before a jury. See Comedy III Prods., Inc. v. New Line Cinema, 200 F.3d 593, 594 (9th Cir.2000)”

This was not the case for all for all the image evidence sought to be admitted:

“Conversely, the other images on the web-pages provided by Schneider fall under no such exception. See Nightlight Sys. v. Nitelites Franchise Sys., No. 1:04-CV-211, 2007 U.S. Dist. LEXIS 95538, at *16 (N.D.Ga. May 11, 2007) (“[T]o authenticate a printout from a web page, the proponent must present evidence from a percipient witness stating that the printout accurately reflects the content of the page and the image of the page on the computer at which the printout was made.”); cf. Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 561 (D.Md.2007) (“Photographs have been authenticated for decades under Rule 901(b)(1) by the testimony of a witness familiar with the scene depicted in the photograph who testifies that the photograph fairly and accurately represents the scene.).FN10 Similarly, Best Shot attached unauthenticated photographs of an unknown origin depicting images such as toothpaste, popcorn, and other equine-care products. ( See, e.g., Doc. 86 at 7.) These images must also be disregarded. See Magnum Towing & Recovery v. City of Toledo, 287 Fed. Appx. 442, 448 (6th Cir.2008) (“[The district] court properly did not consider any documents ... that were unauthenticated or otherwise failed to meet the requirements of Rule 56(e) of the Federal Rules of Civil Procedure.”) (citations omitted); see also Lorraine, 241 F.R.D. at 561.

The Court also provides an interesting comment (and appears to take issue) with the decisional authority considering it inappropriate to take judicial notice of publicly available websites for purposes of summary judgment in an interesting footnote. Note that the Court appears to follow the Hape “purpose of authentication” approach, but couches its language in hearsay terms:

“FN10. The Court does, however, question the case law indicating that it is generally inappropriate to take judicial notice of the content of publically available websites for purposes of summary judgment, particularly to the extent that these cases frequently fail to distinguish between material offered for the truth of the matter asserted and material offered for the fact of its publication.”

In an even more interesting aside, the Court muses on the benefits of what might best be described as a rebuttable presumption of authenticity:

“It might well be preferable to require parties to assert a good-faith belief that proffered evidence was inauthentic as a predicate to challenging its authentication. This is not, however, the evidentiary rule. Consequently, the Court declines to take notice of the images attached to Best Shot's briefing, except with respect to the images depicting the use of the very marks that are the subject of the instant dispute.”

If wishes were fishes…

Case: Gaffield v. Wal-Mart Stores East, LP

Citation: 2009 WL 890654 (N.D.N.Y. 2009)
Date: 2009-03-31
Topics: Standards for review of U.S. Magistrate Judge Report and Recommendtion(s)

This decision from the United States District Court for the Northern District of New York set out the standards for a District Judge’s review of a U.S. Magistrate Judge’s report and recommendation, and discusses the standard to be followed both in the presence and absence of objections.

No Objections to Report and Recommendation – Clear Error

“Where the parties do not object to a report and recommendation, the court reviews the report and recommendation for clear error. See Farid v. Bouey, 554 F.Supp.2d 301, 306 (N.D.N.Y.2008) (citation omitted).

Objection Made to Report and Recommendation – De Novo Issue Review

Where a party makes specific objections addressed to portions of the report and recommendation, the court conducts a de novo review of the issues raised by the objections. See id. at 307 (citation omitted).FN1”

In this case, Senior District Judge Scullin noted that there were no objections to defendant’s motion for dismissal of plaintiff’s motion for sanctions and applied the appropriate standard:
“Since there was no objection to Magistrate Judge's Lowe's recommendation of dismissal of Plaintiff's motion for spoliation sanctions against Wal-Mart and there being no clear error, the Court adopts this recommendation.”


Saturday, April 11, 2009

2009-04-11 Cooperation, Documentation Retention, Spoliation, ESI Authentication, Hearsay,and a Petard Hoist Self-Help

Cooperation and Competency: Leading off is a decision by U.S. Magistrate Judge John Facciola of The District Court for the District of Columbia addressing both the margins of eDiscovery as well as the limits to which the Courts will assist in providing counsel with the other half of the eDiscovery picnic sandwich. For those attorneys and parties who have neither heard nor heeded the clarion call for eDiscovery cooperation in matters brought before federal judges, Magistrate Judge Facciola provides insightful guidance, and some hints as to the future judicial treatment of poorly articulated discovery requests.

Document Retention Policies: In what appears to be a case of first impression, the District Court of Utah finds that the absence of a document retention policy may be considered a factor in duty to preserve violations, (For body of digest: the question whether or not to have a doc retention policy frequently arises. Better to have or have not? Imo, it’s always better to have something to lean on, rather than leave it to a court (or worse, a jury) to determine whether there was a federal common law preservation trigger. This decision may well put that question to rest. Better to have one, and follow it. This decision also addresses ESI authentication and hearsay issues as well as duties to preserve and timeline triggers.

Spoliation: These digests provide (admittedly anecdotal) evidence of a notable increase in the volume of ESI spoliation litigation. Analyzed are decisions from: the Eleventh Circuit Court of Appeal, two from the District of Arizona. More to come next week.

Catch 22 Award: This week’s hands-down winner is the Supreme Court of Ohio, which ruled that a criminal defendant alleging spoliation of ESI must first make a prima facie showing of spoliation --- without being permitted access to the evidence drive. Imo, the dissent offered the more rational approach.


Newman v. Borders, Inc., --- F.R.D. ----, 2009 WL 931545 (D.D.C. 2009)
Adams and Associates, L.L.C v Dell, Inc., 2009 WL 910801 (D. Utah 2009)
Tieco, Inc. v. USX Corp., 2009 WL 921266 (11th Cir. 2009)
Reed v. Honeywell Intern., Inc., 2009 WL 886844 (D. Ariz. 2009)
Marceau v. International Broth. of Elec. Workers, 2009 WL 891036 (D. Ariz. 2009)
State of Ohio v Rivas, --- N.E.2d ----, 2009 WL 875216 (Ohio 2009)

Case: Newman v. Borders, Inc.

Cite: --- F.R.D. ----, 2009 WL 931545 (D.D.C. 2009)
Date: 2009-04-06
Topics: Call for Cooperation, ESI Document Retention Policy Discovery Fit Subject for Discovery, consequence of failure to identify Fed. R. Civ. P. 30(b) topics, no ask-no get.

In this decision from the District of Columbia District Court, Magistrate Judge John Facciola rules on a motion to amend a discovery order limiting the number of depositions, and a second motion to compel an additional Rule 30(b)6 deponent.

Plaintiff had apparently served what might best be described as a notice of deposition topics that was either poorly worded, or an overly broad. As a result, the Rule 30(b)6 deponent was ignorant of certain topics relating to defendant’s email and email retention policy:

“Plaintiff served a notice to take a deposition pursuant to Rule 30(b)(6).Motion to Compel, Exhibit 3. Attached to the notice and identified as “Exhibit A” was a detailed list of the nine topics that would be the subject of the deposition. See id. at 5-7.Borders designated Lisa Morrow to testify as to four of the nine topics. The first of those was “Borders' document, information, and record collection and retention policies and practices.”Id. at 5. This topic had in turn nine subdivisions that specified the “policies and practices” that would be the subject of the deposition. Id.”
“During the course of her deposition, Morrow was asked if she knew about Borders's policy regarding the retention or destruction of e-mails. She responded:

"The Witness: I don't know what the specific retention policy is. I know the e-mails are backed up in our I.T. department. I don't know how long they're kept for.”

“Given Morrows' ignorance, plaintiff wants Borders to designate another 30(b)(6) witness to testify as to Borders's “e-mail retention policies and any searched [sic] conducted of emails.””

Defendant’s opposition complained of “mousetrapping” by plaintiff. Defendant argued that plaintiff’s Rule 30(b)6 notice requested deposition of an individual with “general” information and document retention policy, but asked questions relating to email management and retention. Interestingly (and especially so in this time of ESI predominance) defendant pointed out that plaintiff made no “formal” document requests relating to defendant’s email retention policy.

In what is perhaps one of the first decisions in which counsel’s eDiscovery (poor) eDiscovery articulation does not result in a reflexive judicial second helping, the Court denies the motion requesting amendment of the District Court’s discovery to allow for an additional deposition.

The Court also notes quite plainly what argument might augured in favor of granting the additional deposition, and what plaintiff instead chose to assert:

“Plaintiff justifies its demand not by pointing to any claim of missing or deleted e-mails or because it has some specific reason to believe that e-mails pertaining to the incident were once in existence but have never been produced. Rather, he paints with a much broader brush, insisting that it is important that another 30(b)(6) designee be named to testify as to Borders's retention of e-mails and the searches for them in this case “because Defendants have repeatedly failed to produced [sic] responsive documents until Plaintiff learned of the existence of such documents and specifically requested them or the Court ordered Defendants to produce them.””

Discoverability of eMail Retention Policy and Production of Knowledgeable 30(b)6 Designee

Although the Court appeared to be less than utterly impressed with the quality of discovery undertaken by plaintiff’s counsel, it did recognize that an outright denial of the relief requested might result in prejudice to the requesting party. The Court first proceeds with an analysis of the discoverability of document retention policies, and the right of a party to notice for deposition a Fed.R. Civ. P. Rule 30(b)6 individual with sufficient knowledge to testify in connection therewith:

“That a party's document retention policies, including its policies as to electronically stored information, may be a fit subject of discovery cannot be gainsaid. Huthnance v. District of Columbia, 255 F.R.D. 285, 287 (D.D.C.2008) (quoting Doe v. District of Columbia, 230 F.R.D. 47, 56 (D.D.C.2005)). “

“It is equally clear that a party must produce as its 30(b)(6) designee a person who can speak knowingly as to the topic and, if necessary, educate that designee so that she can do so. Intervet, Inc. v. Merial Ltd., No. 06-CV-658, --- F.R.D. ----, 2009 WL 540392, at *4 n. 1 (D.D.C. Mar. 4, 2009)”

Obligation to Clearly Define Topics of Notice Deposition

The Court then qualifies this right of a requesting party by including with an obligation on the part of a requesting party to be clear about what it seeks, and the knowledge set of the individual sought to be deposed:
“There is, however, a concomitant responsibility upon the party who had noticed the 30(b)(6) deposition to define as clearly as possible the topics for the deposition.”

In this matter, no request for email, email retention policies, or even the term “electronically stored information” were included in plaintiff’s document production requests, which the Court points out were otherwise “remarkably detailed.”

No Ask (in RPD), No Get (Knowledgeable Deponent)

Ok, perhaps the caption should read “ask and ye shall receive,” but in this case, plaintiff did not ask for the specie of documents (defendant’s email, email retention policy, and other ESI) in its document requests, and accordingly, the Court found it reasonable for the defendant not to produce a Rule 30(b)6 deponent so knowledgeable:

“I cannot say that a reasonable lawyer reading that document would conclude that Borders's e-mail retention policy and the search for e-mails pertaining to this case were going to be topics of the deposition. Instead, in a world where the vast majority (to put it mildly) of all communications within businesses is electronic, I am hard pressed to understand why, if plaintiff thinks it so obvious that information about defendants' e-mail policy and the search for e-mails were called for by the topic description, plaintiff did not simply say so.

“While I appreciate that plaintiff's claim that defendants initially failed to produce a portion of a document that should have been produced is unrebutted, I have presided over the discovery in this case and have found absolutely no indication that the defendants have engaged in any behavior that would suggest that defendants have knowingly destroyed any pertinent e-mails or failed to search conscientiously for pertinent e-mails.

A Somewhat Solomonic Result

Teeing up to his decision, Magistrate Judge Facciola at once recognized the importance of discovery of a party’s document retention policy as well as the Court’s “unquestioned right (if not the duty) to bring discovery disputes to an end.” The Court’s take on the parties’ discovery activities:

“I am stunned by how much time and effort has been spent on discovery in a case that involves a confrontation between plaintiff and a store detective that could not have taken much time. I am also well past being convinced that the potential legal fees in this case, thanks to the many discovery disputes, will dwarf the potential recovery, if there is one.”

And so, with a terrible swift sword, the decision was split by the Court.

The half given to defendant: “The time has come (it may have come and gone) for me to bring this particular controversy about e-mail to a quick and merciful end without another costly deposition.”
The half given to plaintiff: Although it ultimately denying plaintiff’s request for leave to conduct additional depositions, the Court appeared unwilling to penalize the plaintiff for the shortcomings of counsel’s discovery activity. Instead, the Court sua sponte provided a set of 9 court-crafted questions to be answered in an affidavit from a knowledgeable representative of the defendant.

An interesting feature of this decision is that the parties represented to the Court that they had attempted (unsuccessfully) to resolve this discovery dispute by agreeing to the terms of an affidavit to be provided by defendant. The Court believed otherwise:

“I understand from their papers that the parties attempted to resolve the controversy by trying to agree to an affidavit from Borders that spoke to the issues that arose during Morrow's deposition. They did not try hard enough.”

The Court makes the point (as have so many others) that genuine counsel cooperation in eDiscovery matters is now a near-mandate:

“Counsel should become aware of the perceptible trend in the case law that insists that counsel genuinely attempt to resolve discovery disputes. See Covad Commc'ns Co. v. Revonet, Inc., 254 F.R.D. 147, 149 (D.D.C.2008); see also Sedona Conference Cooperation Proclamation (2008), available at http://www.thesedonaconferen Proclamation.pdf.”
Takeaways: Failure to request ESI in document requests has two consequences: First, ESI will in all likelihood not be produced. The second is that a producing party may justifiably not produce a deponent with knowledge about ESI, and ESI retention, where production of the ESI itself either is not, or has been inarticulately requested; second, expect such helpfulness from the Court to be an exceptional (and a fading one at that) rather than a routine occurrence.

Case: Phillip M. Adams & Associates, L.L.C. v. Dell, Inc., et al.
Cite: 2009 WL 910801 (D. Utah 2009)
Date: 2009-03-30
Topics: Spoliation, 10th Circuit standards for establishing spoliation, standards for determination of spoliation sanctions, bad faith finding required in 10th Circuit for imposition of adverse inference, duty to preserve, temporal trigger of duty to preserve, information management practices as basis for finding of culpability, absence of document retention policy factor in evaluation of spoliation sanctions, ESI authentication and hearsay challenges in sanctions motion

This decision by United States Magistrate Judge David Nuffer from the U.S. District Court for the District of Utah provides what appears to be a first-of-its-kind ruling that the absence of a document retention policy is a “pertinent factor” to consider in evaluation sanctions for spoliation.

First, a bit of context. This is a patent infringement matter, and involves a patentee who invented floppy disk related technology, and subsequently commenced an infringement action against many of the major computer and computer component manufacturers. This decision resulted from plaintiff’s motion for sanctions “Based Upon Asus’ Spoliation of Evidence of It’s Piracy.” Avast, mateys, and read on. Plaintiff alleged that defendant had destroyed ESI (source code) and test documents (unclear whether these documents were paper-based or ESI). Plaintiff claimed that the spoliated documents would have conclusively proved defendant’s piracy.

Absence of Evidence Does Not Mean Evidence of Absence

Yes, that’s what plaintiff asserted: that “Because ASUS has produced so little, Adams therefore draws the conclusion that ASUS has destroyed evidence.”

But wait, there’s a twist. Defendant actually produced numerous documents, but according to the Court, not what was requested:

“ASUS's only response is that it has produced a large volume of documents. That may be the case; but, it has not produced the most critical documents-those that relate to its misappropriation, its copying, and its willful behavior. The only conclusion after all this time is that ASUS has destroyed critical evidence that it simply cannot show did not exist”

Spoliation and Discovery Abuse Hearing Practice Is Trial Practice

I had taken the position that spoliation hearings are really trials-in-miniature. Perhaps, in light of the 2008 Qualcomm v Broadcom, Rambus, Keithley v Homestore, Gutman v Klein, and Nucor v Bell decisions, spoliation hearings may now be considered real, grown-up trials. A critical difference in a spoliation or discovery abuse hearing is that a party’s counsel may well turn out to be a fact witness. Spoliation and discovery abuse hearings typically take place before a judge, and involve the proffer of testimonial, documentary, and other evidence. As with a trial on the merits, evidentiary proceedings in such hearings will invoke (in Federal Courts) the Federal Rules of Evidence, and whatever jurisdictional decisional authority is followed by the presiding District Court.

Motion to Strike Evidence in Support of Sanctions Motion

With the understanding that spoliation and discovery abuse sanctions hearings are trials-with-a-twist (just add a dash of counsel witness for added flavor) it should come as no surprise that defendant filed a motion to strike evidence in an attempt to gut plaintiff’s spoliation motion.

Blognote: Some attorneys might prefer to wait until trial, and then file a motion in limine to exclude spoliated evidence. Imo, a more prudent course of action would be to file a spoliation motion as soon as evidence proving same is acquired by the non-spoliator. It might also be advisable to combine a motion for spoliation with a discovery abuse motion where appropriate.

In any event, defendant attempted, with very limited success, to have the evidence of spoliation excluded on the basis of both authentication and hearsay.

Authentication Challenges – Emails and Header Printouts

Defendant first sought to strike exhibits, including, inter alia, a co-defendant’s eMail, claiming that there was no testimony from the offering party as to the authenticity of the email, and that therefore the eMail should be stricken as not satisfying the requirements imposed by Fed. R. Evid. Rule 901. The emails had, however, been produced by one of the co-defendants in a related case, and since that co-defendant could authenticate those emails in the instant case, the Court wasn’t buying, and one might consider the court to have deemed this evidence “pre-authenticated:”

“As to the emails, ASUS says “Plaintiff has not submitted a sworn testimony that the emails attached as Exhibits A through D to its memorandum are authentic under Fed.R.Evid. 901, which requires a witness with “knowledge ... that a matter is what it is claimed to be.” FN70 These emails were first produced by Winbond in the Gateway case, not in this case. FN71 Winbond was not a party to the Gateway case, but is a party in this case. While it is not clear on this record whether Winbond also produced the emails in this case, it is clear that Winbond would readily authenticate them again by production, which would be an effective authentication against all parties to the case.FN72 Authentication for this motion is satisfied.”

Footnote 72 cites to a Ninth Circuit decision: Orr v. Bank of Am., 285 F.3d 764, 776 (9th Cir.2002)

Defendant also mounted an authentication to a “program header printout:”

“Plaintiff's explanation of the source of [the program header printouts] is ‘A copy of each programming header is attached hereto as Exhibit I’. Plaintiff's cursory account of Exhibit I's origin is insufficient under Rule 901, which requires “evidence sufficient to support a finding that the matter in question is what its proponent claims.” FN73””

Once again, a co-defendant had produced the program files as having come from defendant, and so the program printouts were deemed “sufficiently authenticated for this motion.”

The Court also notes that defendant claimed only “insufficient authentication” and did not repudiate the ESI evidence, and deemed plaintiff’s authentication sufficient in light of defendant’s “marginal” challenge.

Defendant’s “Internal Evidence Vacuum”

Magistrate Judge Nuffer provides an early assessment of defendant’s evidence management behavior, and a hint of what was to follow, in this excerpt rejecting defendant’s authentication challenges:

“ASUS claims a nearly total absence of evidence, disputing any evidence produced by other parties. The purpose of authentication is to buttress reliability and filter untrustworthy evidence. ASUS is using the requirement of authentication, in conjunction with its internal evidence vacuum, to eliminate the only evidence available because ASUS will not repudiate, authenticate or contradict it. That the evidence comes from other sources will be considered as to the weight the evidence may have, but ASUS should not be able to prevent consideration of the best evidence available, which has reasonable assurances of authenticity.”

Hearsay Challenges - eMail

Well, if authentication challenges won’t stick, the next best approach is to mount a hearsay challenge. Which is just what defendant did. One of defendant’s various hearsay challenges addressed the emails of a co-defendant. The Court accepts them as business records of that co-defendant:

“The Winbond emails are admissible business records of Winbond. They reflect the activities and knowledge of Winbond and only mention involvement of ASUS.”
“Because the records themselves are the actual communications, they are timely recorded, regular activities; they memorialize events and conditions; and they have no indicia of untrustworthiness. They do not purport to reflect statements of unidentified third parties.”

Blognote: It should be pointed out that this approach is emblematic of the low bar for a finding that ESI hearsay falls within the business records exception of Fed. R. Evid. Rule 803(6). The “indicia of untrustworthiness” is a condition subsequent, and absent some showing by a party challenging trustworthiness of ESI, the application of the business records exception to ESI hearsay remains to this day a virtual fait accompli. In his book, “The Foundations of Digital Evidence” author George Paul makes a cogent and supportable argument that computer generated information is not “born with integrity” or trustworthiness. Mr. Paul also argues that unless some testable integrity mechanism (not mere sworn testimony) is applied to computer generated information at the time relevance is asserted to attach, such computer generated information should not be considered trustworthy. Put this author in the same camp as Mr. Paul.

Attachments to Business Records Emails are Business Records

The defendant next challenged the “program header printouts” attached as exhibits to plaintiff’s motion for sanctions. The court provided this analysis: First, the emails were referenced and “enclosed” [I think this means attached] in an email produced a co-defendant as having come from the defendant. Second, “coupled with the emails, the program header printouts constitute admissible business records.”

The upshot: “The arguments ASUS makes about authenticity and chain of custody all go to weight.”

Now, onward to the Motion for Sanctions itself.

Motion for Sanctions – Threshold Issues to Establish Spoliation and Standards for Determination of Sanctions

Magistrate Judge Nuffer first notes that a spoliation hearing involves two separate determinations. First, threshold issues on a spoliation motion include establishing:

“(a) that evidence has been lost, destroyed or made unavailable and
(b) that the party against whom sanctions are sought had a duty to preserve the evidence.”

The second determination provides that if these elements are established, “the determination of sanctions is subject to other standards.”

Unavailable Evidence

Plaintiff produced a veritable laundry list of materials defendant would be “expected to have,” including test program source code, and documentation of their development, documentation of testing activities during the relevant time period, relevant communication with testing and design experts, documentation of defendant’s internal discussions relating to the licensing of plaintiff’s technology.

It certainly did not help defendant’s position that other co-defendants had copies of evidence that defendant should itself have possessed:

“Adams claims that “[t]he evidence that Winbond provided in the Gateway litigation does not leave any doubt that these documents existed and that ASUS had them.” FN107 Certainly, other parties have provided evidence that one would expect ASUS to have as well. And the volume and tenor of the Winbond communication and concurrent Yang emails would suggest ASUS should have far more evidence than it has produced in this case.”

Admissions that a party destroyed evidence is typically not helpful in challenging a spoliation assertion:

“ASUS' own statements and productions highlight data that is missing. “[N]o documents, programs or source code have been discarded since ASUSTeK received some information of Plaintiff's potential claims against ASUSTeK in early 2005.” FN108 ASUS therefore admits that materials prior to 2005 could have been destroyed because of its information management practices.”

The Court’s take:

“The universe of materials we are missing is very large. Indisputably, we have very little evidence compared to what would be expected.”


Duty to Preserve

The Court then turns to the issue of ESI preservation and first notes that the parties agreed that “a litigant's duty to preserve evidence arises when “he knows or should know [it] is relevant to imminent or ongoing litigation.” Jordan F. Miller Corp. v. Mid-Continent Aircraft Service, Inc., No. 97-5089, 1998 WL 68879, *5 (10th Cir. Feb. 20, 1998).” [Author’s note: the Court employs endnotes rather than in-text citations]

Temporal Trigger of Duty to Preserve

The Court first addresses the issue of timing: when was the duty to preserve triggered?

Constructive Notice May Trigger a Duty to Preserve

In this patent matter, the plaintiff sent a letter (relating to defendant’s possible infringement of plaintiff’s patents). The Court notes that the receipt of plaintiff’s counsel’s letter was not an “inviolable benchmark” and noted that Tenth Circuit decisional authority provided for a triggering event to occur based on constructive, rather than actual notice, or where “[t]he district court found that plaintiff had a duty to preserve the evidence because it knew or should have known that litigation was imminent....” 103 Investors I, L.P. v. Square D Co., 470 F.3d 985 (10th Cir.2006).”

First and Last Temporal Triggers of Duty to Preserve

The Court also provides a determination of the last date in which the discarded information should have been available:

“Separate and apart from the benchmark date to start preservation is the last date on which information related to the patent application, including the source code, should have been available. Adams says “ASUS would have to have kept the source code for the test programs because its application remained pending until June 2005.” FN130 ASUS does not explain how, why or when its source code was discarded.”

Seeking Shelter in the ESI Safe Harbor

Defendant claimed shelter in the safe harbor provision of Fed. R. Civ. P. Rule 37(e):

“ASUS claims it can find a safe harbor against sanctions because of the recently adopted rule that sanctions may not be generally imposed for “failing to provide electronically stored information lost” if a party can show the loss was “a result of the routine, good-faith operation of an electronic information system.”

Blognote: Some of the spoliated evidence was paper based and not ESI. Other than pointing out general principles applicable to both ESI and non-ESI, the discussion and analyses here addresses only ESI.

Expert [Consultant] Safe Harbor Testimony – Hoisted on One’s Own Petard

In its efforts to seek shelter under Fed. Rule Civ. P. Rule 37’s safe harbor, defendant in this matter provided “an extensive declaration from an experienced consultant in eDiscovery.” Unfortunately, the declaration served more to damage than bolster defendant’s argument. The testimony, unlovingly parsed by the author:

Helpful: Expert “stated the reasons for and history of ASUS' “distributed information architecture.”
Not Helpful: “[Expert] did not state any opinion as to the reasonableness or good-faith in the system's operation,”

Helpful: “ASUSTeK's data architecture relies predominantly on storage on individual user's workstations.”
Not Helpful: “[The expert’s] 31-page declaration does not show he is familiar with the precise practices pointed out in the declarations of employees.

Not Helpful: “Neither the expert nor ASUS speak of archiving “policies;” they speak of archiving ‘practices.’”
Not Helpful: Apart from archiving, neither the expert nor the employees describe any sort of backup system or data backup policy, past or present. Presumably ASUS' current data is at the mercy of individual employees' backup practices.
Not Helpful: “The expert does not evaluate risk of data loss from ASUS' reliance on employees though he does specifically mention the expected turnover of employees in this industry FN137 which would seem to heighten the risk.”

Expert Testimony: Ready, Fire, Aim

Where an expert’s testimony torpedoes his or her client:

“He does mention that certain financial-related data is stored in centrally accessible and presumably secure, backed-up servers.”

I believe the Court is being somewhat tongue-in-cheek when it concludes that defendant’s expert testimony shows that “ASUS does know how to protect data it regards as important.”

The upshot: Defendant is not entitled to Rule 37 safe harbor protection: “The information before the court does not demonstrate that ASUS' loss of electronic information is within the safe harbor provision.”

But wait, here’s the teaser for the next episode: “Further, there has been no explanation of the loss of other information”

Determination of Appropriate Sanction

Having determined that defendant violated its duty to preserve evidence, and after finding that under the circumstances, defendant’s ESI destruction was not afforded protection under Fed. R. Civ. P. Rule 37’s safe harbor provisions, the Court then turns to the type of sanction to be imposed.

The Court then provides an analysis under Tenth Circuit decisional authority for the determination of sanctions:

“’When deciding whether to sanction a party for the spoliation of evidence, courts have considered a variety of factors, two of which generally carry the most weight: (1) the degree of culpability of the party who lost or destroyed the evidence, and (2) the degree of actual prejudice to the other party.” FN139 [Jordan F. Miller Corp. v. Mid-Continent Aircraft Service, Inc., No. 97-5089, 1998 WL 68879 at *4 (10th Cir. 1998).]

“The most widely known sanction is the adverse inference instruction, but other sanctions range from admonitions to granting judgment or dismissal.’”

Tenth Circuit Culpability Analysis in Spoliation Proceedings

Bad Faith Required for Imposition of Adverse Inference

The Court first points out that the “general rule” in the Tenth Circuit is that “bad faith destruction of a document relevant to proof of an issue at trial gives rise to an inference that production of the document would have been unfavorable to the party responsible for its destruction.”” [Aramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir.1997)]

Degree of Control Influences Severity of Sanctions

The Court then discusses the Tenth Circuit’s approach to determination of severity of spoliation sanctions, indicating that a spoliator’s degree of control over destroyed evidence can influence the determination of sanctions severity:

“A sliding scale of sanctions may be imposed depending on the degree of control the alleged spoliator had over the evidence and the spoliator's subjective intentions.

Terminating Sanctions Not Appropriate

The Court then states that “Case law defines the factors to consider when terminating sanctions are sought,” and discusses factors it is to take into consideration:

“The district court should consider the following factors when considering whether dismissal is an appropriate sanction: (1) the degree of actual prejudice to the opposing party, (2) the degree of interference with the judicial process, (3) the litigant's culpability, (4) whether the litigant was warned in advance that dismissal was a likely sanction, and (5) whether a lesser sanction would be effective.FN142” [LaFleur v. Teen Help, 342 F.3d 1145, 1151 (10th Cir.2003).]

The Court finds that in this matter, terminating sanctions are not appropriate because defendant was not “warned of the possibility of a terminating sanction,” and because plaintiff had other sources for evidence spoliated by the defendant.

Questionable Information Management Practices as Basis for Finding of Culpability

The Court focuses its determination of culpability on defendant’s “questionable” information management practices:

“The culpability in this case appears at this time to be founded in ASUS' questionable information management practices. A court-and more importantly, a litigant-is not required to simply accept whatever information management practices a party may have. A practice may be unreasonable, given responsibilities to third parties. While a party may design its information management practices to suit its business purposes, one of those business purposes must be accountability to third parties.”

Information Management Practices that Lead to Denial of Access to Evidence

The Court also notes that defendant’s information management practices denied plaintiff of access to evidence, thereby thwarting the discovery rules:

“[U]tilizing a system of record-keeping which conceals rather than discloses relevant records, or makes it unduly difficult to identify or locate them, [renders] the production of the documents an excessively burdensome and costly expedition. To allow a defendant whose business generates massive records to frustrate discovery by creating an inadequate filing system, and then claiming undue burden, would defeat the purposes of the discovery rules.” Kozlowski v. Sears, Roebuck, 73 F.R.D. 73 (D.Mass.1976).

The Court’s finding:

“ASUS' system architecture of questionable reliability which has evolved rather than been planned, operates to deny Adams access to evidence. This should not be excused.”

The reasons provided by the Court:

“ASUS did not have a designed information management policy taking varying needs into account. ASUS offers no statements from management-level persons explaining its practices, or existence of any policies.”

Absence of Document Retention Policy is Pertinent Factor in Sanctions Decision

In what appears to be one of the first decisions to adopt verbatim Guideline 1 of the Sedona Principles, the Court states:

“An organization should have reasonable policies and procedures for managing its information and records.” FN145 [Guideline 1, The Sedona Guidelines: Best Practice Guidelines & Commentary for Managing Information & Records in the Electronic Age (November 2007).]

Magistrate Judge Nuffer adopts decisional authority from the Southern District of Florida in finding that the absence of a document retention policy can negatively influence a spoliation determination:

“The absence of a coherent document retention policy” is a pertinent factor to consider when evaluating sanctions. FN146 [Telectron, Inc. v. Overhead Door Corp. 116 F.R.D. 107, 123 (S.D.Fla.1987)]”

Moreover, the Court notes, “[I]nformation management policies are not a dark or novel art. Numerous authoritative organizations have long promulgated policy guidelines for document retention and destruction.”

After finding that that plaintiff was prejudiced by defendant’s spoliation, the Court found that the imposition of sanctions was appropriate, but deferred determination of any particular sanction until the close of discovery.

It would not be surprising to see the imposition of an adverse inference instruction to the jury in this matter.

Case: Tieco, Inc. v. USX Corp.
Cite: 2009 WL 921266 (11th Cir. 2009)
Date: 2009-04-07
Topics: Independent tort of spoliation in Alabama - maybe.

The 11th Circuit appears to state in a somewhat qualified fashion that, in this case that there is no Alabama state law based independent tort of spoliation:

“FN1. To the extent that plaintiff's complaint alleges a new claim for the independent tort of spoliation, the district court correctly concluded that Alabama law does not recognize that claim as asserted here. “

Blognote: The Alabama Supreme Court apparently thinks otherwise, and is a bit more forthright about the existence of this tort, and negligence as the basis for such actions:

“Although there is no general duty to preserve evidence, “Alabama clearly recognizes the doctrine that one who volunteers to act, though under no duty to do so, is thereafter charged with the duty of acting with due care and is liable for negligence in connection therewith.” Dailey v. City of Birmingham, 378 So.2d 728, 729 (Ala.1979).FN3 When a third party has knowledge of a pending or potential lawsuit and accepts responsibility for evidence that would be used in that lawsuit, it should be held liable for damage resulting from the loss or destruction of that evidence.” Smith v. Atkinson, 771 So.2d 429, 432 (Ala. 2000)

The Supreme Court of Alabama reiterated its position in 2008 and announced a formal three part test for third party negligent spoliation:

"In Smith v. Atkinson, 771 So.2d 429, 432 (Ala.2000), this Court recognized that general principles of negligence law afford an Alabama plaintiff a remedy when evidence crucial to that plaintiff's case is lost or destroyed through the acts of a third party. [FN4] “

“We further explained how a claim of spoliation of evidence against a third party fit within the negligence framework: "As in all negligence actions, the plaintiff in a third-party spoliation case must show a duty to a foreseeable plaintiff, a breach of that duty, proximate causation, and damage. Crowne Invs., Inc. v. Bryant, 638 So.2d 873, 878 (Ala.1994).

“We announce today a three-part test for determining when a third party can be held liable for negligent spoliation of evidence. In addition to proving a duty, a breach, proximate cause, and damage, the plaintiff in a third-party spoliation case must also show:

(1) that the defendant spoliator had actual knowledge of pending or potential litigation;

(2) that a duty was imposed upon the defendant through a voluntary undertaking, an agreement, or a specific request; and

(3) that the missing evidence was vital to the plaintiff's pending or potential action. Once all three of these elements are established, there arises a rebuttable presumption that but for the fact of the spoliation of evidence the plaintiff would have recovered in the pending or potential litigation; the defendant must overcome that rebuttable presumption or else be liable for damages." Smith, 771 So.2d at 432-33." Killings v. Enterprise Leasing Co., Inc. 2008 WL 4967412, 4 (Ala.) (Ala.,2008)

Case: Reed v. Honeywell Intern., Inc.
Cite: 2009 WL 886844 (D. Ariz. 2009)
Date: 2009-03-31
Topics: Duty to preserve handwritten notes spontaneously taken during meeting, Second Circuit’s “reasonable knowledge of potential relevance to anticipated litigation triggers duty to preserve approach acknowledged in 9th Circuit and Arizona federal courts, bad faith not required, and inadvertence may provide basis for spoliation, timing of sanctions imposition

In this wrongful termination matter from the United States District Court for the District of Arizona, plaintiff maintained that a defendant failed to preserve certain relevant handwritten meeting notes created by defendant’s former employment manager. Upon his departure from defendant’s employ, the former manager left the handwritten notes in his desk. The Court found that defendant recognized the potential for litigation in connection with plaintiff’s termination more than a year before the employment manager left defendant’s employ.

Here now, a response from one of defendant’s counsel explaining the possible fate of the handwritten notes:

“When an attorney for Honeywell was asked what happens to notes and records that are left in a departing employee's desk, she replied “’[H]opefully the next HR person would pick them up. But I can't tell you what happens in every case.’”

The Court then tees up its spoliation analysis by stating the relief sought by plaintiffs:

“Plaintiff requests that this Court exercise its discretion to impose the specific sanction of excluding evidence relating to the alleged investigation that Defendants claim to have conducted into the allegations against Ms. Reed and her subordinates because of Defendants' failure.”


District Judge Murguia then sets out Ninth Circuit spoliation sanctions requirements, beginning with “inherent powers” as the basis for sanctions impositions. Following Second Circuit doctrine, the Court notes that spoliation need not be in “bad faith” and that adverse inference instructions may be appropriate even where the loss of evidence is inadvertent:

A district court has the inherent power to levy sanctions for spoliation of evidence. U.S. v. $40,955.00 in U.S. Currency, 554 F.3d 752, 758 (9th Cir.2009). As Defendants concede, a party's destruction of evidence need not be in “bad faith” to warrant a court's imposition of sanctions in the Ninth Circuit. Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir.1993). Defendants argue that the loss was inadvertent and that inadvertent losses do not warrant sanctions. Med. Lab. Mgmt. Consultants v. Am. Broad Cos., 306 F.3d 806, 824 (9th Cir.2002) (holding that trial court did not abuse its discretionary power in refusing to order an adverse inference for inadvertently lost slides that were either misplaced or stolen between a hotel room in Geneva and Defendants' expert's landing in New York City).

“However, in the Ninth Circuit, sanctions may be awarded even for inadvertent loss. Leon v. IDX System Corp. ., 464 F.3d 951, 959 (9th Cir.2006) (affirming $65,000 spoliation sanction where party had some notice of pending litigation but claimed that it overwrote computer files to protect privacy rather than to avoid litigation).”

Spoliation Leaves No Meaningful Alternative

The Court notes that defendant provided typewritten memoranda of the critical meeting(s), and that the Court’s review of these memoranda found them to be mere summaries, and ruled that summaries were wanting:

“However, a review of the typewritten memoranda reveal that they are summaries of what occurred in the meetings rather than “transcriptions” of the notes spontaneously taken during a meeting. Plaintiffs are therefore left without a meaningful alternative to Mr. Eden's handwritten notes. “

The Court then notes that defendant had a duty to preserve the handwritten now of the now-departed employee at least one year prior to the onset of litigation:

“Moreover, “[t]he duty to preserve material evidence arises not only during litigation but also extends to the period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation.” World Courier v. Barone, 2007 WL 1119196 at *1 (N.D.Cal.2007) (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998)). Defendants apparently anticipated litigation on this matter at least a year prior to Mr. Eden's departure and the disappearance of the notes.”

As a result of the destruction of the handwritten notes, the Court notes, plaintiffs were left with no opportunity to cross examine defendant’s former employee manager about the handwritten notes and his typewritten summaries.

Type and Timing of Spoliation Sanctions

The Court finds that spoliation has occurred and then concludes that “[T]he only remaining question is the appropriate sanction.” Plaintiff requested relief consisted of broad evidence exclusion. The Court disagreed, and ruled that:

“[A]ny sanctions for misbehavior on the part of [defendant] is more appropriately remedied at trial or at the conclusion of the case.”

But wait, that’s not all folks. Finding that striking any and all evidence as requested by plaintiff would result in a directed verdict, the Court imposed a (somewhat) less draconian sanction of an adverse inference:

“Based on the information presented, the Court is prepared to consider an adverse jury instruction at trial. Striking any and all evidence relating to the BRAVO investigation would essentially constitute a directed verdict as it would likely guarantee a verdict in Plaintiff's favor. A directed verdict appears too harsh a penalty for Defendants' alleged inadvertent conduct. Halaco Engineering Co. v. Costle, 843 F.2d 376, 380 (9th Cir.1988) (“In cases where the drastic sanctions of dismissal or default are ordered, the range of discretion for a district court is narrowed and the losing party's non-compliance must be due to willfulness, fault, or bad faith.”). Plaintiff's motion for sanctions for spoliation of evidence is therefore denied as premature without prejudice to Plaintiff's refiling of the motion as a Motion in Limine or Request for Adverse Jury Instruction prior to trial. “

Blognote: Compare this decision with IBEW case that follows. It appears that in the Arizona federal courts (and perhaps also in the Ninth Circuit) inadvertence may trigger the imposition of a spoliation sanction, whereas accident (or innocent loss) may not.

Case: Marceau v. International Broth. of Elec. Workers
Cite: 2009 WL 891036 (D. Ariz. 2009)
Date: 2009-03-31
Topics: Spoliation, destruction of documents, document preservation obligations, court’s inherent powers to impose adverse inference sanction for spoliation, no sanction imposition for accidental or innocent loss

My spoliation migraine is returning, and it’s time to bring out the aspirin. In this RICO action, decided on the same day and by the same District Judge (Murguia) in Honeywell, the plaintiff accused defendant of violating both the latter’s internal document retention policy as well as other legal or regulatory document retention requirements and moved for an adverse inference.

Spoliation Analysis Redux

Noting that sanctions imposition for spoliation may arise from either the violation of a discovery order pursuant to Fed. R. Civ. P. 37 or from the court’s inherent powers, District Judge Murguia provides an analysis relying on Ninth Circuits adoption of the Second Circuit’s approach in West and Kronisch, as well as District Judge Scheindlin’s Zubulake decisions.

“ ‘A federal trial court has the inherent discretionary power to make appropriate evidentiary rulings in response to the destruction or spoliation FN18 of relevant evidence.’ “ Medical Laboratory Management Consultants v. American Broadcasting Companies, Inc., 306 F.3d 806, 824 (9th Cir.2002) (quoting Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir.1993)). A district court “has the broad discretionary power to permit a jury to draw an adverse inference from the destruction or spoliation against the party or witness responsible for that behavior.” Glover, 6 F.3d at 1329 (citing Akiona v. U.S., 938 F.2d 158, 161 (9th Cir.1991)); see Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y.2003) (“Zubulake IV”) (“The spoliation of evidence germane ‘to proof of an issue at trial can support an inference that the evidence would have been unfavorable to the party responsible for its destruction.’ ”) (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998)).FN18. Spoliation is “the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999).

Carve- Out One: Employer Spoliation

Drawing on Seventh Circuit precedent, however, Judge Murguia then appears to adopt a carve-out for document destruction by an employer:

““An employer's destruction of or inability to produce a document, standing alone, does not warrant an inference that the document, if produced, would have contained information adverse to the employer's case.” Park v. City of Chicago, 297 F.3d 606, 615 (7th Cir.2002).”

Carve-Out Two: Reasonably Should Know Means “Some” Notice

The Court first sets forth the Second Circuit’s position on duty to preserve for future litigation, adopted mostly in tact by the Ninth Circuit, except, of course that “should know” now means that some actual (rather than constructive) notice of potential future litigation relevance must take place:

“ ‘The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation.’ “ World Courier v. Barone, 2007 WL 1119196, at * 1 (N.D.Cal.2007) (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998)); see Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 436 (2d Cir.2001) (“The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.”).

“In addition, “Defendants engage in spoliation of documents as a matter of law only if they had ‘some notice that the documents were potentially relevant’ to the litigation before they was destroyed.” U.S. v. Kitsap Physicians Service, 314 F.3d 995, 1001 (9th Cir.2002) (quoting Akiona v. United States, 938 F.2d 158, 161 (9th Cir.1991)). However, only a ‘minimum link of relevance’ is required to permit a jury to draw an adverse inference. Akiona, 938 F.2d at 161.“”

Spoliator Bad Faith Not Required

It is clear that in the Ninth Circuit, bad faith is not required in order for a court to impose the sanction of an adverse inference instruction to a jury:

“Moreover, despite Defendants' contention to the contrary, the party seeking to introduce evidence of spoliation need not establish bad faith on the part of the party who destroyed the evidence. Glover, 6 F.3d at 1329 (“[A] finding of ‘bad faith’ is not a prerequisite to [permit a jury to draw an adverse inference].”) (citing Akiona, 938 F.2d at 368-70 & n. 2). Nonetheless, “when relevant evidence is lost accidentally or for an innocent reason, an adverse evidentiary inference from the loss may be rejected.” Medical Laboratory, 306 F.3d 806, 824 (9th Cir.2002) (citing Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1159 (1st Cir.1996)).”

Awareness of Possibility of Future Litigation – An Issue of Fact

Accident and innocence notwithstanding, the Court also finds that the facts and circumstances of this case warranted a finding that the facts and circumstances of this case were:

“…[s]ufficient to establish a reasonable inference that Corporate Defendants were aware of the possibility of future litigation involving the instant claims.”

In essence, the court tells us, is whether the defendants “reasonably should have anticipated future litigation.”

Blognote: I don’t see how a party could “anticipate” anything other than a future event.

Totality of Circumstances and Relevance – An Issue of Fact

The Court also found that based on ample witness testimony, there existed sufficient evidence to “establish a genuine issue of fact as to whether the destroyed documents were relevant to Plaintiffs’ claims.”

“Thus, based on the totality of the circumstances, it is reasonable to infer that documents pertaining to sales accounts are at the very least potentially relevant to this litigation, which involves, among other things, allegations of account manipulation. See Medical Laboratory, 306 F.3d at 824 (a district court may base its conclusion regarding whether to issue an adverse inference instruction on the totality of the circumstances).”

Assertion of Innocent Destruction, and Protection Under Fed. R. Civ. P. Rule 37 Safe Harbor – A Question of Fact

In their opposition to plaintiffs’ spoliation motion, defendant’s defenses (supported by testimony) included assertions to the effect that the destroyed documents were copies disposed of in accordance with the routine operation of defendant’s document retention policy. It was also “unclear” said the Court, whether there was personal knowledge of the destruction of the subject documents.

Adverse Inference Sanction Imposition Improper at Summary Judgment Stage

The Court, employing the “totality of circumstances” approach, punted, and in denying the motion without prejudice, left the adverse inference determination for post-summary judgment proceedings:

“That evidence, in addition to the totality of the circumstances, establishes questions of fact concerning the nature of the destroyed documents, in addition to credibility determinations, that are inappropriate for resolution on summary judgment. Accordingly, the Court cannot draw an adverse inference at this time and must deny without prejudice Plaintiffs' Motion to the refiling of the Motion prior to trial as a Request for an Adverse Jury Instruction.”

Case: State of Ohio v Rivas
Cite: --- N.E.2d ----, 2009 WL 875216 (Ohio 2009)
Date: 2009-03-31
Topics: Spoliation assertion must be made by prima facie showing, absent prima facie showing, forensic imaging of allegedly spoliated hard drive not permitted.

In this criminal case decision, the Ohio Supreme Court ruled that “[W]hen a prosecutor has provided a written transcript that purports to accurately reflect data stored on a computer hard drive, a court may not order an examination of the computer hard drive unless the defense makes a prima facie showing that the state has provided false, incomplete, adulterated, or spoliated evidence.”

Of course, making a prima facie showing of ESI contained on a hard drive without conducting a forensic examination of that hard drive is, well, impossible. It certainly is not ascertainable from any “written transcript”

The dissent has the more reasoned approach. Noting that appropriate limiting cautions could be taken,

“There is no requirement in the discovery provisions of the Criminal Rules that a defendant who wishes to verify the accuracy of the printed version of electronic data stored on a state's computer hard drive must first make a prima facie showing that the state provided false, incomplete, adulterated, or spoliated evidence.”

“Although defendant's basis for asserting a discrepancy between the printed version of the data and the version that resides on the computer hard drive may seem unusual, there is no justification for creating, as the majority opinion does, a permanent judicial gloss over the plain language of the discovery rules to short-circuit defendant's discovery request.”