2009-02-11 Reasonably Usable, Cost Shifting, Preservation Notices, Suspension of Routine Document Retention Policy


A trio of interesting cases this week, The first involves what may be an emerging use of the phrase “reasonably usable” to require native format data production even where the request does not so state. That option may not be without cost shifting to the requestor, however. The second decision involves bad (or non-existent) preservation notification practice. The third decision involves an insufficient showing by a party that its adversary had violated a litigation hold by failing to suspend its routine document retention policy.

SWT

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Case: In re Classicstar Mare Lease Litigation
Citation: 2009 WL 260954 (E.D.Ky. 2009)
Date: 2009-02-02
Topics: Native data format production; reasonably usable;reproduction in native format ordered, cost shifting

In this decision, U.S. Magistrate Judge James Todd denied Defendant Geostar’s Motion for Protective Order involving production of ESI in native data format. There were discovery requests propounded by two groups of plaintiffs. Before the Court stands another example of (imo) inarticulate discovery requests in the digital age (and post the 2006 FRCP amendments):

First the request from the “Westfield Hills Plaintiffs:

“Request No. 9 sought GeoStar's “financial statements, whether accountant or internally prepared, all other financial information, all general ledgers, all accounting journal entries (such as cash receipts, cash disbursements,etc.) and the source documents evidencing those entries pertaining to the financial condition of GeoStar from 2001 to the present.” With regard to the format of the requested production, the West Hills Plaintiffs requested the production of responsive documents “as they are kept in the usual course of business or [as] organized and labeled to correspond with the paragraphs and subparagraphs set forth below.””

Note the clarity with which native format data was not requested. Not surprisingly, defendant Geostar objected:

“GeoStar objects to Plaintiffs' proposed form for producing electronically stored information. GeoStar further objects to Plaintiffs' definition and instructions related to “computer file” as set forth in Definitions and Instructions paragraph 13(f). GeoStar further objects on the grounds that requests for “computer files,” as defined in paragraph 13(f), are unduly burdensome and cost prohibitive. GeoStar specifically objects to this definition as exceeding the scope of Federal Rule of Civil Procedure 34.GeoStar supports the proposal of Defendant David Plummer that the parties agree on an appropriate protocol for the production of responsive electronically stored information pursuant to Federal Rule of Civil Procedure 34, as amended and now in effect.”

Geostar, for its part, relied on its pattern of past production which comprised .tif format files with load files in either Concordance or Summation discovery database format.


Aguilar v Dept. of Homeland Security --- Footnote 3

The Court then relies on a footnote from Aguilar v Dept. Homeland Security--- F.Supp.2d ----, 2008 WL 5062700 (S.D.N.Y. 2008) to support the proposition that a .tiff file or a .pdf file is a “mirror image of the electronic document.

“FN3. TIFF is a static image format similar to a PDF that creates a mirror image of the electronic document. See PSEG Power N.Y., Inc. v. Alberici Constructors, Inc., No. 1:05-CV-657 (DNH)(RFT), 2007 WL 2687670, at *2 n. 2 (N.D.N.Y. Sept. 7, 2007); In re Payment Card Interchange Fee & Merch, Disc., No. MD 05-1720(JG)(JO), 2007 WL 121426, at *1 n. 2 (E.D.N.Y. Jan. 12, 2007).”


Digest Author’s Opinion and Note: A .tiff file Is Not an Image and Not a Mirror Image

I will on occasion take exception to a decisional point that I think misapprehends basic technology definitions. I do this not to create a “gotcha” but so that I (and other litigators) won’t have to argue over and again against decisional authority used to perpetuate that misapprehension.Consider those cases decided pre-Aguilar refusing to permit discovery of metadata based on AutoNation as precedent, which in turn placed reliance on Sedona’s pre-epiphaniacal “most metadata has no value” proclamation.Sedona’s position stood uncorrected and in stark contrast to the clear understanding of those many attorneys and technologists involved in eDiscovery practice for more than two years. Of course, Sedona has now turned 180 degrees in its approach to metadata, but this nevertheless provides cold comfort to the many litigants who were denied the opportunity to engage in proper discovery during the two-plus year pre-flip.

That said: This decision (and Aguilar) incorrectly defines a term that has, but, imho, a tiff or pdf file is not and should not be accepted as (1) a bit for bit image of a “document” (whatever that means, as some ‘documents’ begin their lives as pieces of records in a database) and (2) is certainly not a “mirror image” because it is not an image in the first place, even though the screen image can be duplicate. The Classicstar Court relies on this statement made by Judge Maas in Aguilar v, Dept, Homeland Security, but repetition does not make an erroneous definition correct.


“Reasonably Usable” Saves the Day For Requestor – Again

It appears that ‘reasonably usable” determinations are beginning to favor the production of native data format eve where native format data is not expressly requested. Here, defendant Geostar asserted that its original production met and satisfied its production obligation by producing .tif files, and not surprisingly, that since Plaintiffs had not specified native format data, Defendants were obligated to produce only that which was “reasonably usable:

“GeoStar takes the position that GeoStar's original production, thus, met and satisfied the requirements of Fed.R.Civ.P. 34(b)(2)(E). See Autotech Tech. Ltd. Partnership v. Automtaiondirect.com, Inc., 248 F.R.D. 556, 559-60(N.D.Ill.2008) (where a party does not specify a format in which the documents are to be produced, production of documents in .pdf and .tif format “complied with the ordinary meaning of Rule 34”). GeoStar argues that it had the option to produce the documents in their native format or in an alternative format that was “reasonably usable” and that did not “significantly degrade” the searchability function of the documents. See United States v. O'Keefe, 537 F.Supp.2d 14, 23 (D.D.C.2008) (“production of the electronically stored information in PDF or TIFF format would suffice, unless defendants can show that those formats are not ‘reasonably usable’and that the native format, with the accompanying metadata, meet the criteria of ‘reasonably usable’ whereas the PDF or TIFF formats do not”).”


Sua Sponte Reasonably Usable Analysis:

In what may appear to be a surprising twist, the Court undertakes a “reasonably usable” analysis to determine the appropriateness of requiring the production of metadata, even though Plaintiffs never argued the issue:

"Plaintiffs do not directly address the issue of whether the data, as already produced is “reasonably usable,” arguing instead that the production of data in its native format would save them “hundreds of hours.” The West Hills Plaintiffs argue that “[i]n cases where the financial data is voluminous, [the] reporting feature is essential to the discovering party's ability to sort through the data.” [Response at 5.] In other words, the West Hills Plaintiffs are not arguing that the data produced is not usable, only that it could be so much more us[e]able in its native format.”

Although the Court states that the issue to be decided is whether the production was reasonably usable (citing a 500 page .tif file as an example) it was also concerned that Defendants had at one point agreed to produce native format data:

“The question before the Court, then, is whether GeoStar's original production was “reasonably usable” under Fed.R.Civ.P. 34(b)(2)(E). If the production made was “reasonably usable” and the non-native format did not “significantly degrade” the searchability of the documents, Geostar argues that it should not be required to make a second production and that the burden is on the West Hills Plaintiffs to provide proof that the production does not meet these requirements. See, e.g., Perfect Barrier LLC v.Woodsmart Solution, Inc., No. 3:07-cv-103-JVB, 2008 WL 2230192, *3 (N.D.Ind.May 27, 2008).”

“Nonetheless, the Court is very concerned by a July 25, 2008, exchange between counsel for the West Hills Plaintiffs and counsel for GeoStar Corporation, which reads as follows: This letter responds to your prior letter and emails regarding documents produced by GeoStar Corporation. You asked that we produce the financial and accounting records in their native format. I do not know, however, whether you have the software to be used in connection with that information. GeoStar runs two software packages for its financial records: (1) Creative Solutions; and (2) Oil & Gas Information Systems. It is my understanding that the later program may cost in excess of $15,000. Although we could provide you with the data housed in these programs, it would be useless without the software in which to import that data. We will provide you with the financial records in a format that will allow you to upload them into your Summation or Concordance database, and we can provide you with the data in its native format if you chose to buy the software.”

“Whatever the wording of the Request and Geostar's obligations under the relevant Rules of Civil Procedure, it is quite clear that GeoStar agreed to produce the material in its native format to the West Hills Plaintiffs and that GeoStar understood that the West Hills Plaintiffs considered the data “degraded” without the metadata intact. Indeed, the West Hills Plaintiffs have apparently concluded that it is worth the cost of obtaining the specific software necessary to read the native format data so that they might use its embedded metadata to better understand the data and the information that it represents.”


Saving the Requestor’s Bacon – Ineffective Addressing of Native Format Data Issue

Ok, it is now clear that it is the Plaintiff/requestor let off the hook by the Court:

“Having considered the facts and arguments presented and the relevant law, the Court shall order GeoStar to produce the data in its native format-effectively holding the parties to the agreement that they reached between themselves during the summer of 2008-notwithstanding the fact that the West Hills Plaintiffs' request may not have effectively addressed this issue on its own.”


But Not Without Cost Shifting

The Court was concerned about the implications of ordering what was tantamount to a re-do of Defendants’ discovery production, and the additional burdensomeness and costs asserted to be associated with it by the Defendants. The Court also holds Plaintiffs accountable for inarticulately propounded and (apparently) badly managed eDiscovery efforts. The result (and a sub-rosa warning to those who might view “reasonably usable” arguments as a cost-free “eDiscovery Request Repair Kit” :

“Finally, as GeoStar has already produced the data once and as the original document request did not specify a native format production, it is only fair to shift the reasonable cost of copying and delivering this second production to the West Hills Plaintiffs.”“


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Case: Stone v Lockheed Martin Corp.
Citation: 2009 WL 267688 (D. Colo. 2009)
Date: 2009-02-02
Topics: Preservation letters, failure to send preservationletter, stay of eDiscovery pending motion to dismiss

In this case, Plaintiff filed an “Emergency Motion to Preserve Evidence” and Defendant filed a Motion to Stay Discovery Pending Ruling on Motion to Dismiss and Plaintiff’s “Motion for Order to Protect Plaintiff from Defendant’s Process and Discovery Abuse.” This short decision provides scant factual background, but hints at what is happening between the parties. The Court here granted Defendant’s motion to stay discovery (using its discretionary powers). Under 10th Circuit precedent, a Court, in considering the propriety of a stay must determine:

“[w[hether the movant is likely to prevail in the related proceeding; whether, absent a stay, any party will suffer substantial or irreparable harm; and, the public interests at stake. United Steelworkers of America v.Oregon Steel Mills, Inc., 322 F.3d 1222, 1227 (10th Cir.2003).

A stay of discovery under the instant circumstances is clearly the nuclear option and is to be made on a case-by-case analysis:

“The underlying principle in determination of whether to grant or deny a stay clearly is that ‘[t]he right to proceed in court should not be denied except under the most extreme circumstances.” Commodity Futures Trading Com'n v. Chilcott Portfolio Management, Inc., 713 F.2d 1477, 1484 (10th Cir.1983)(quoting Klein v. Adams & Peck, 436 F.2d 337, 339 (2d Cir.1971). In other words, stays of the normal proceedings of a court matter should be the exception rather than the rule.’”

Two points are noteworthy. First, the type of pleadings filed by Plaintiff, which appear (imo) designed to make discovery unilateral (i.e., excusing plaintiff but not defendant”). Second, it also appears that something has occurred to undermine the Plaintiff’s case in the main. Whether it be an obvious ground for dismissal or the behavior of the plaintiff is unclear.The Court granted the stay, and denied Plaintiff’s Motions, without prejudice, pending its determination of Defendant’s Motion to Dismiss.

Even more intriguing are these two lines from the decision:

“The “Emergency Motion to Preserve Evidence” (Doc. No. 33) is DENIED without prejudice, as Plaintiff failed to assert or attach a “presentation letter.”Plaintiff is directed to review the information regarding eDiscovery & Digital Evidence attached to this order.”
I have not seen the term “presentation” letter come up in this context, and I believe the quotations are to emphasize the necessity for a party seeking information to issue a “preservation” letter. The second line provides an excerpt from a good eDiscovery handbook by Grenig and Gliesner.

“References"

"§ 7:8. Preservation letter"

"A carefully drafted “preservation” letter should be sent to the other party or the other party's attorney at the earliest possible moment, describing the data to be preserved, and requesting a meeting to construct a mutually acceptable search and production protocol.[ FN1 ] The preservation letter is a very important tool. At a minimum, It places the other party on notice with respect to its duties to avoid spoliation. It also serves as an excellent basis for seeking sanctions, if it is later discovered that spoliation did in fact occur. [ FN2 ] The actual tenor and content of a preservation letter will almost certainly be a matter of speculation, to a significant degree, because it should be sent before, or at the same time, as the commencement of litigation and well before any voluntary disclosures by a party under Rule 26 of the Federal Rules of Civil Procedure [ FN3 ], and before any discovery has occurred. However, the preservation letter does not have to be simple guess work either. Basic investigative work should uncover appropriate points to include in such a letter. For example, much can be inferred about the nature of possible digital evidence in the possession of a party and its location from the party's government filings (such as SEC or UCC filings), as well as from a party's own website.[ FN4 ].Common sense should guide the actual points to include in a preservation letter. This is not a discovery request; all counsel is trying to do is to “freeze frame” the digital holdings of a party so that they do not evaporate, through intentional misconduct or the normal processes associated with the deletion of computer files due to the ongoing business of a party.A party can disregard the request to preserve, but once the request has formally been made and evidence disappears, a preservation letter may place the discovering party in a superior position to seek sanctions or other relief. At a minimum, a letter should begin with a general statement that the discovering party expects the party to preserve digital evidence that in all probability will be relevant to the issues in a case, or may lead to the discovery of such evidence. The preservation letter should include a request that the other party suspend its regular document retention policy pending discovery.[ FN5 ] The preservation letter should identify all of the possible locations where such evidence might conceivably reside. *3 Writing a letter or otherwise putting a party on notice of the intention to seek eDiscovery is not an idle gesture. Spoliation is the destruction of, or failure to, preserve and protect evidence.[ FN6 ] A party has the duty to protect and preserve evidence once it is on notice that it must do so.[ FN7 ] Courts have held that a party may be under a duty to prevent spoliation even if litigation is only reasonably anticipated.[ FN8 ] Important: A court may also order the preservation of digital data during the pendency of a lawsuit.[ FN9 ] Spoliation of digital evidence after a preservation order has been issued can have very severe consequences. [ FN10 ]"

"The letter should inform the opposing party that a mere file backup of the hard drive Is not adequate preservation.[ FN11 ] The party must be instructed to image hard drive in bit-stream copies, where all areas, used and unused, of the hard drive are copied. [ FN12 ] If a file is deleted before a backup is made, the deleted file will not be copied unless it is a bit-stream copy. [ FN13 ] The letter should also request that deleted files that are reasonably recoverable be immediately undeleted. [ FN14 ] If the discovering party suspects data will not be preserved properly and is dealing with a Novell NOS system, the discovering party should consider Including a request in a preservation letter for an “NSS Pool Snapshot” that can be preserved for later use during discovery. According to Novell: In NetWare 6.5, Novell Storage Services supports pool snapshots to improve backup and restore services. A pool snapshot is a metadata copy of a storage data pool that preserves a point-in time view of a data pool. When you back up a pool from its pool snapshot, your backup can capture every file in the pool on your server. A pool snapshot also supports file recovery. After you take a snapshot, you can activate it at a later time to access the original pool's data as it existed at the time of the snapshot. Both the pool and its snapshots can be active and available concurrently. You access data on the active pool snapshot just as you would any other pool, even while data is changing on the original pool you snapped. [ FN15 ] Windows 2003 Server has a similar utility called “shadowing.” If a discovering party suspects data will not be preserved properly and is dealing with a Windows 2003 environment, the discovering party should consider including a request in a preservation letter for a “shadow copy” that can be preserved for later use during discovery. Windows 2003 shadow copy function takes a snapshot of a network volume and places the copy on a different volume on the network.After a snapshot is taken, files from the read-only shadow can be accessed at any time without complications typical of network volumes that are in use. [ FN16 ] Preserving evidence becomes a simple matter of taking a snapshot that can be searched and used like the original volume, without disrupting the network in anyway. This may render traditional backups unnecessary and put the power of deleted file restoration in the hands of every user with appropriate permission.”

Another warning to tread carefully when commencing litigation that involves ESI.


Post Script: Quite by a coincidence of contemporaneity, a decision by Judge ___ (N.D. Indiana) in Cunningham v Smithkline Beecham (---F.R.D. --- (2009 WL 250401 (N.D. Ind. 2009), follows District of Columbia District Court precedent, offering a different perspective on whether discovery may be compelled where the sufficiency of a claim or defense information is atissue:

“Discovery is not to be denied because it relates to a claim or defense that is being challenged as deficient. (Citing Alexander v FBI, 194 F.R.D. 316 (D.D.C. 2000, quoting in turn 8 C. Wright & A. Miller, Federal Practice & Procedure §2008 (2d ed. 1994).

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Case: Ellington Credit Fund, Ltd., v. Select Portfolio Services, Inc.
Citation: 2009 WL 274483
Date: 2009-02-03
Topics: Insufficient support for claims that document retention policy.


Ok. This is a short one.

Just saying so doesn’t make it true, especially where claims of ESI destruction for failure to impose litigation hold is concerned. Of course, the decision does not state whether an expert was retained to substantiate the assertions, or whether adequate pre-motion discovery (such as a Fed. R. Civ. P. 30b deposition) was conducted. U.S.District Judge Sullivan decided this matter with the record reflecting mere assertions by the party requesting that the Court revisit the imposition of a stay on discovery, and an affidavit of the opposing party’s “Vice President of Data Conversion and Corporate Advance Control.” It appears as if no pertinent discovery was attempted by party seeking to lift the stay.It should come as no surprise that an affidavit trumps a “naked” assertion:
“In the instant motion, Plaintiffs ask the Court to revisit its finding that they would not be prejudiced by the discovery stay. Indeed, they assert that they “have already been prejudiced” by the “confessed destruction of electronic evidence in native format” by Defendant Select Portfolio Servicing, Inc. (“SPS”). (Pls.' Mem. ¶ 1 (emphasis added).) The basis for that contention appears to be Plaintiffs' allegation that “Base Liquidation Reports” maintained by SPS “are no longer available in native format due to systematic purges of Defendant SPS's computer systems....” ( Id. ¶ 10.) Put simply, Plaintiffs' assertions are unpersuasive.”


In opposition to the instant motion, SPS provided an affidavit from Joseph Arico, SPS' Vice President of Data Conversion and Corporate Advance Control, stating that a litigation hold was imposed at SPS when this action was commenced. (Arico Aff. ¶ 5.) The Arico Affidavit states further that, as a result of the litigation hold, the “regular document retention policy has not been applied to the documents and files relating to the loans at issue in this case,” ( id. ¶ 5), and that no relevant files-including Base Liquidation Reports-have been destroyed ( id . ¶ 9). Plaintiffs have not challenged the representations in the Arico Affidavit, and they point to no specific circumstances to support a finding that documents have, in fact, been destroyed.”

“*2 Based on Defendants' representations, and absent any evidence to the contrary, the Court is satisfied that Defendants are fully aware of their obligation to preserve documents relevant to this matter, as well as the risks associated with failing to do so. Therefore, Plaintiffs have not demonstrated that they “have already been prejudiced”-or that they are likely to be prejudiced in the future-by the discovery stay. Accordingly, the discovery stay imposed in the Court's June 12, 2008 Order will remain in place.”


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