2009-01-21 Counsel-Client Cooperation; Continuing Meet-and-Confer Obligations, Form and Format of Production, Undue Burden, and the Emergence of the Two Part Test to Determine Whether ESI is Produced as Kept in "The Usual Course of Business"


Case: Highway 46 Holdings, LLC v. Quantified Marketing Group, LLC
Cite: 2009 WL 113402 (M.D. Fla. 2009)
Date: 2009-01-16
Topics: Vertical duty to cooperate (between client and counsel) in discovery and case management, failure to cooperate a factor in granting terminating sanctions, Florida standard for terminating sanctions is willful and deliberate.

This decision from Judge Antoon, affirming the report and recommendation of U.S. Magistrate Judge Baker confirms that the duty to cooperate in discovery (including, imo, eDiscovery) extends to Counsel and Client as well between opposing counsel. Under 11th Circuit standards, a deliberate or willful failure to do so can help support the imposition of terminating sanctions:


"...the Court finds that Defendant has acted willfully and wrongfully in disobeying the Court order compelling discovery and has made a conscious decision not to prosecute the counterclaim nor defend this action, by failing to provide discovery, failing to respond to two motions to compel discovery, failing to cooperate with its own counsel regarding its discovery and case management obligations, and failing to respond to the motion for sanctions, seeking default and dismissal. The Court also finds that lesser sanctions will not suffice."

It also appears that defendants' counsel attempted (unsuccessfully) to withdraw. The Court recognizes this, recognizes counsel's difficult position, and reserves judicial ire for the defendants alone. By Order denying defense counsel's renewed motion to withdraw, the Court expressly noted:

"The Court is mindful that the circumstances of the case are likely to make it impossible for counsel to respond to scheduling and discovery requirements (including the matters described in the most recently filed motion [Doc. no. 35] ), which may result in Plaintiff seeking relief (perhaps even a default). Such a result does not reflect on counsel so long as he has kept his erstwhile client informed of the proceedings and its responsibilities and maintains his candor about his inability to respond substantively. The Defendant's failure to abide by obligations to its own counsel should not be permitted to prejudice the Plaintiff or slow the progress of the case. Counsel must continue the representation as best he can, and any adverse consequences resulting from his client's failure to cooperate with existing counsel or to obtain substitute counsel would be attributable to the client, not to counsel."

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Case: S.E.C. v. Collins & Aikman Corp.
Cite: 2009 WL 94311 (S.D.N.Y. 1009)
Date: January 13, 2009
Topics: Email eminently searchable, accessibility, second meet and confer to negotiate reasonable search protocol, work product privilege applicability to "selections" of documents, government agency discovery obligations, government's good faith efforts obligation to negotiate with adversaries regarding search protocol, government assertion of undue burden based on limited public resources.

In this major securities fraud case initiated by the SEC against Collins & Aikman (and, individually David Stockman), an excerpt near the end of the decision encapsulates a key issue:

"When a government agency initiates litigation, it must be prepared to follow the same discovery rules that govern private parties (albeit with the benefit of additional privileges such as deliberative process and state secrets)."

Some background: Defendant Stockman served a Rule 34 discovery request on the SEC asking for 54 separate categories of documents. In response,

"[t]he SEC produced 1.7 million documents (10.6 million pages) maintained in thirty-six separate Concordance databases-many of which use different metadata protocols."

The Court first notes that the databases "d[id] not match Stockman's requests" and that "[N]either party has explained what each database contains. The parties are obviously off to a less-than-perfect start.


Rule 34 Form of Document Production

The Court begins by discussing the two options available to a producing party:

" The litigant may either produce documents "as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request."

The Court later refers to the Advisory Committee notes in adding that this language was added to Rule 34 to prevent "'deliberately [mixing] critical documents with others in the hope of obscuring significance,'" and "intended to minimize the burden of production while maintaining "'internal logic reflecting business use.'"


Work Product Protection and "Selections" of Documents

The Court next turns its attention to the attorney work-product privilege as it pertains to the selection of documents asserted to support a factual allegation in a complaint, and rules such selection non "core" work product. "Core" work product is defined as

"...legal documents drafted by an attorney-her mental impressions, conclusions, opinions, and legal theories. This highest level of protection applies to a compilation only if it is organized by legal theory or strategy."

The Court then summarily rejects the SEC's global work product assertion:

"[t]he SEC's theory that "every document or word reviewed by an attorney is an attorney's work product leaves nothing to surround the core"


Undue Hardship

The SEC took the position that Stockman was free to search nearly 10 million documents. The Court acknowledges both undue hardship and apparent futility:

"Indeed-at significant expense and delay-Stockman could search the document databases using appropriate search terms, but the inaccuracy of such searches is by now relatively well known.FN39 A page-by-page manual review of ten million pages of records is strikingly expensive in both monetary and human terms and constitutes "undue hardship" by any definition."


"FN39. See George L. Paul and Jason R. Baron, Information Inflation: Can the Legal System Adapt?, 13 Rich. J.L. & Tech. 10, at *36-*40 (2007); Jason R. Baron, David D. Lewis, and Douglas W. Oard, TREC-2006 Legal Track Overview, available at http:// trec.nist.gov/pubs/trec15/papers/LEGAL06.OVERVIEW.pdf (noting in a sophisticated study that compared to more complex and costly techniques, Boolean searching located only 57% of known relevant documents, while expert manual searching located 68%). Such a search would be further frustrated by the differing metadata protocols used in the numerous Concordance databases."


Form of Production and The Emergence of the Two Part "Usual Course of Business" Test

This case presents the Court with novel form-of-production issues. The SEC's position is that even if the compilation was not protected by the work product privilege, it (the SEC) had the option to "complete, unfiltered, and unorganized investigatory file, as this is how the documents are maintained in the usual course of its business."

Some background: A typical discovery request for document might (and in actuality should) state that any response shall be made in a format that represents how those documents are maintained or used in the "usual course" of a producing party's business activity.

The Court discusses in a footnote that neither the advisory committee notes, nor any records of congressional debate aid in construing the meaning of the phrase. Instead, the Court turns for guidance to the Federal Rules of Evidence, and Black's Law Dictionary:

"FN44Surprisingly, this term is neither defined nor explained in the advisory committee notes. Nor are there records of congressional debate or cases defining the term. In contrast, there is substantial background concerning Federal Rule of Evidence 803(6), which addresses "regularly conducted business activity." I will discuss this provision below. As Federal Rule of Evidence 803(6) predates the relevant provision in Federal Rule of Civil Procedure 34 by six years, the history of the evidentiary rule is instructive-albeit non-binding-to the interpretation of the procedural rule."

The Court starts its approach to defining "maintained in the usual course of business" with a discussion of the business records exception to the hearsay exclusionary rule set forth in Fed. R. Evid. Rule 803(6). A good summary of the Court's reasoning is provided, again by way of footnote:

"FN47. Fed.R.Evid. 803(6), 1972 Advisory Committee Note. The justification for the Rule is found in the 1972 Advisory Committee Note to the proposed rule: "The element of unusual reliability of business records is said variously to be supplied by systematic checking, by regularity and continuity which produce habits of precision by actual experience of business in relying upon them, or by a duty to make an accurate records as part of a continuing job or occupation." Id. The Committee noted that the key concepts in this exception are "routineness and repetitiveness." Id."

Judge Scheindlin, provides by "rough analogy" (the Court's words) what is imo a logically compelling definition of "in the usual course of business" by offering up a two part test:

"By rough analogy to Rule 803(6), the option of producing documents "as they are kept in the usual course of business" under Rule 34 requires the producing party to meet either of two tests. First, this option is available to commercial enterprises or entities that function in the manner of commercial enterprises. Second, this option may also apply to records resulting from "regularly conducted activity." FN53 Where a producing party's activities are not "routine and repetitive" such as to require a well-organized record-keeping system-in other words when the records do not result from an "ordinary course of business"-the party must produce documents according to the sole remaining option under Rule 34: "organize[d] and label[ed] ... to correspond to the categories in the request.""

The Court's logic is impeccable:

"When records do not result from "routine and repetitive" activity, there is no incentive to organize them in a predictable system. The purpose of the Rule is to facilitate production of records in a useful manner and to minimize discovery costs; thus it is reasonable to require litigants who do not create and/or maintain records in a "routine and repetitive" manner to organize the records in a usable FN55 fashion prior to producing them."

Major takeaway: We now have (at least in the Southern District of New York) a new two part test to determine whether documents are kept in the usual course of business.

First, there must be a usual course of business in which to keep said documents.

Second, a "usual course of business" presumption may arise from a "regularly conducted activity."

Note that where there is no "regularly conducted activity" or "usual course of business" a producing party is then required to organize such records in a usable fashion prior to producing them. This third takeaway will have two major implications in eDiscovery practice. First a party requesting documents should zealously protect its option (some would say responsibility) for articulating an ESI document production request in a manner designed to obtain native format data. Second, where there is no discernible or identifiable "usual course of business" or "regularly conducted activity" associated with document organization, the requesting party should fashion its requests accordingly.


Another Call for Cooperation

The Court rejects outright the SEC's "blanket refusal to negotiate a workable search protocol as "patently unreasonable," Judge Scheindlin invokes the recently published "Sedona Conference Cooperation Proclamation" which urges parties to work in a cooperative rather than adversarial manner to resolve discovery disputes "in order to stem the 'rising monetary costs of discovery disputes.'" The Court holds the specter of an appointment of a Special Master to supervise remaining discovery in this case if, after the Court ordered additional meet and confer, the parties "remain at an impasse":

"With few exceptions, Rule 26(f) requires the parties to hold a conference and prepare a discovery plan. The Rule specifically requires that the discovery plan state the parties' views and proposals with respect to "the subject on which discovery may be needed ... and whether discovery should be conducted in phases or be limited to or focused on particular issues" FN66 and "any issues about disclosure or discovery of electronically stored information .... " FN67 Had this been accomplished, the Court might not now be required to intervene in this particular dispute. I also draw the parties' attention to the recently issued Sedona Conference Cooperation Proclamation, which urges parties to work in a cooperative rather than an adversarial manner to resolve discovery issues in order to stem the "rising monetary costs" of discovery disputes. FN68 The Proclamation notes that courts see the discovery rules "as a mandate for counsel to act cooperatively." FN69 Accordingly, counsel are directly to meet and confer forthwith and develop a workable search protocol that would reveal at least some of the information defendant seeks. If the parties cannot craft an agreement, the Court will consider the appointment of a Special Master to assist in this effort."


Privilege Logs

The Court also rules that the privilege log provided by the SEC was "deficient" and provided insufficient information to the Court in order to evaluate any claims of privilege, and notes that the SEC "asks the Court simply to take its word." One might extend this argument to assert that without document metadata, the producing party is asking that a Court "take its word" that a privilege log actually reflects the metadata of a document to which that privilege is asserted.


eMails

The Court again chides the SEC for making global assertions:


"Because e-mails are inherently searchable, the SEC's blanket refusal to produce any incoming or outgoing e-mails is unacceptable."

Ok, I get the picture. I think. It appears that at least one party refused to negotiate (cooperate) with the other in reaching mutually agreeable parameters for eDiscovery. It's also possible that both parties just ignored the ESI meet and confer requirements of Rule 26 and just propounded away:

"FN95Without even an attempt to negotiate search terms that would weed out privileged, protected, or irrelevant e-mails, the SEC cannot reasonably assert that a routine aspect of modern discovery-search and review of a party's e-mail-is beyond its capability. Essentially, the SEC's position is that the cost of such a search is simply too high, but it has made no effort to document the cost or the likelihood that it would produce relevant, nonprivileged material."

No matter, as the Court was having none of it:

"Once again, the parties are directed to meet and attempt to negotiate a reasonable search protocol (considering the use of appropriate search terms and appropriate limitations of subject matter and date) and then to consider applying this search protocol to a segment of the SEC's e-mail collection to determine whether relevant nonprivileged material might be identified and produced considering all of the factors set forth in Rule 26(b)(2)(C)."

It is perhaps no coincidence that this decision comes hard on the heels of Judge Scheindlin's recent eDiscovery/Special Master's law review article.

Let there be no doubt that Judge Scheindlin walks her talk.

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Case: Viacom Intern., Inc. v. YouTube, Inc.
Cite: 2009 WL 10208 (N.D. Cal. 2009)
Date: 2009-01-14
Topics: Fed. R. Civ. P. Rule 45 Non-party subpoenas, non-party motion to compel ESI.


In this class action, United States Magistrate Judge Patricia Trumbull granted defendant YouTube motion to compel production of documents requested by way of a Fed. R. Civ. P. Rule 45 subpoena for ESI served on non-party BayTSP. BayTSP is a DMCA violation detective agency engaged by content providers to monitor YouTube, and "scour[s] every corner of YouTube's site" for DMCA violators:

"BayTSP located in Los Gatos, CA describes itself as 'a service company retained by copyright owners to identify individuals who are making their copyrighted works available for download on the Internet.'"

Non-Party Documents Not Directly Pertaining to Named Defendants Held Discoverable

YouTube requested documents pertaining to non-Viacom entities as well as to content owned by Viacom and its related entities. The Court found no dispute as the relevancy of the latter category of documents. The Court also found, however, that documents requests as they related to non-Viacom related entities were relevant because, pursuant to Rule 26, the information could lead to the discovery of relevant evidence:

"YouTube's stated reasons for obtaining documents related to the non-Viacom related entities appear reasonably calculated to lead to the discovery of admissible evidence. "Rule 26 does not require that the information sought necessarily be directed at the ultimate fact in issue, only that the information sought be reasonably calculated to lead to admissible evidence in the underlying litigation." Gonzales v. Google, Inc., 234 F.R.D. at 683. Accordingly, the court finds that the documents requests as they relate to non-Viacom related entities are relevant too."



Undue Burden


Non-party BayTSP claimed that YouTube's Rule 45 request as overbroad, spanning more than 4 terabytes of data, and one million documents averaging five pages per document, or an estimated five million pages. BayTSP claimed that it spent "over 1900 hours in the last six months searching and reviewing the documents." The number or documents had been narrowed to 650,000 or "half the documents originally identified through the electronic filter"

BayTSP asserted a claim of undue burden and requested cost-shifting. It appears that liability for discovery costs was not quite clear. The Court "at this juncture" found that BayTSP had not shown undue burden, and denied the motion without prejudice.


Format of Production

It's a bit difficult to know what the parties set forth in their "Amended ESI Plan" as to form and format of production. It appears that printouts, load files, and not ESI in native format data was requested. The clue is in the Court's reference to Fed. R. Civ. P. Rule 34(a)'s "reasonably usable" language. That language is, imo, typically triggered where the format of production is not specified, or not made clear in an eDiscovery plan. Not surprisingly, the cost to convert the ESI to reasonably usable (by a third party vendor) was not insignificant:

"YouTube complains that BayTSP has made certain of its documents available on two computer terminals during regular business hours. Therefore, YouTube is constrained to conduct its review and print what it wants at the offices of BayTSP's counsel. YouTube takes no comfort that BayTSP, and perhaps Viacom, will know what documents it has reviewed, what documents it has focused on and what documents it has printed. Instead, YouTube requests that it be allowed electronic access to the Kroll Ontrack database on which the documents exist, be provided with DVDs or other electronic medium of the entire responsive database so that it may upload the database into its own database. This suggested format is consistent with an amended ESI plan governing the underlying litigation. BayTSP states that conversion of the data files onto DVDs or other electronic medium is costly. Indeed, BayTSP speculates the cost could approximate six to ten cents per page to upload.

"Unless YouTube is willing to absorb this cost, BayTSP cannot provide the documents in the requested format. *7 The court agrees that to require YouTube to view that vast amount of documents at the offices of BayTSP's counsel with certain temporal cut-offs is unreasonable. See, e.g., Rule 34(a) requires production in a "reasonably usable form." Fed.R.Civ.P. 34(a)."


Upshot: The Court sent the parties back to meet and confer (with eDiscovery vendor Kroll in attendance) to determine actual cost of obtaining documents and creating [sigh] load files. Note the reference to Chief Magistrate Judge Grimm's decision in Mancia v Mayflower:

"The court agrees that to require YouTube to view that vast amount of documents at the offices of BayTSP's counsel with certain temporal cut-offs is unreasonable. See, e.g., Rule 34(a) requires production in a "reasonably usable form." Fed.R.Civ.P. 34(a). At the hearing, the parties agreed to further meet and confer on the format of production, including discussing with Kroll the actual cost of obtaining documents on the database and/or creating certain load files. Tr. 52:1-15. In light of arguments at the hearing regarding the potential accessibility to electronic documents viewed by YouTube, the court advises the parties to take appropriate measures so that others, intentionally or inadvertently, not determine what documents were viewed, what documents were focused on and what documents were printed. See, e.g., Tr. 32:8-25; 33: 1-25; 34:1-25; 35:14-25; 36: 3-18, 24-25; 37:1-15; 38: 1-6, 19-22. Accordingly, the parties shall further meet and confer on the format of production. "[I]t is in the interests of each of the parties to engage in this process cooperatively." Mancia v. Mayflower Textile Servs. Co., et al., 253 F.R.D. 354, 365 (D.Md.2008)."

Takeaways: Ask for native format data, don't cede interpretation of "reasonably usable" to the producing party, and get that expert in early to clarify form and format of production. Be mindful (as of last week) of Judge Scheindlin's " new two-part usual course of business" test.

2009-01-17 Preservation, Spoliation, Sanctions, and Emergency Relief

Another spoliation hearing in a major patent case, and two from Magistrate Judge Facciola, one of which involves (and orders) preservation of White House emails in advance of the Bush-to-Obama transition, and the other, a good example of bad lawyering.

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Case: Micron Technology, Inc. v Rambus, Inc.
Cite: --- F.Supp.2d ----, 2009 WL 54887, (D. Del. 2009)
Date: 2009-01-09
Topics: Spoliation, spoliation standard in patent cases, document retention policy, reasonable forseeability of litigation triggering document preservation, document retention policy reasonableness test, Third Circuit bad faith requirement for imposition of dispositive sanctions.

In this patent infringement decision, the plaintiff was found by the Court to have spoliated key documents that would have shown involvement in a standards setting organization (reminiscent of Qualcomm v Broadcom). The spoliation was serious enough to warrant a finding of inequitable conduct, which in turn operated to invalidate (and deem unenforceable) the 12 patents asserted as infringed.

Some what-not-to-do's:

1. Post litigation commencement shredding of 480 boxes of documents

2. Document retention policy designed in conjunction with formation of patent litigation strategy (destroy, then litigate).

3. Litigation was reasonably foreseeable (and document preservation triggered) when patent litigation strategy was developed (two years prior to filing suit).

4. Oral, rather than emailed or otherwise recorded discussion of document retention program was encouraged.

The District Court first relies on Federal Circuit precedent (this is a patent case) and states that:

"[T]he imposition of sanctions in, patent cases, is controlled by regional circuit law. Monsanto Co. v. Ralph, 382 F.3d 1374, 1380 (Fed.Cir.2004)."

For those wishing to join, or share my continuing spoliation migraine, I offer the following analysis. The Monsanto case cited by the Rambus court is a Federal Circuit decision which, to my reading, holds only that regional circuit law is to be applied "when reviewing sanctions orders" and does not appear to limit the application of circuit decisional authority to patent matters. In fact, the Federal Circuit precedent relied on by the Monsanto decision says just that:

"A decision to sanction a litigant pursuant to Fed.R.Civ.P. 37 is one that is not unique to patent law, DH Tech., Inc. v. Synergystex Int'l, Inc., 154 F.3d 1333, 1343, 47 USPQ2d 1865, 1873 (Fed.Cir.1998), and we therefore apply regional circuit law to that issue, Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359, 50 USPQ2d 1672, 1675 (Fed.Cir.1999) (en banc in relevant part). Transclean Corp. v. Bridgewood Services, Inc., 290 F.3d 1364, 1370 (Fed. Cir. 2002)"

I bring this up only to point out that if the Rambus court analysis means that a District Court should employ a non-regional circuit (state law rather than Federal common law) in non-patent cases, then woe betide the attorney who must determine the proper spoliation standard in a case where there is.a pendent state law claim asserted together with a patent claim.

Ok, back to the Rambus case. The District Court of Delaware generally follows the spoliation test set forth in the Mosaid case by the 3rd Circuit Court of Appeals, but sprinkles bits and pieces of other District Courts and U.S. Courts of Appeal authority into the decisional mix.

The District Court applies the “Pure” Federal Common Law Spoliation Approach (I use the term “pure” where a Federal District Court relies on Federal Common law only and makes no state spoliation law reliance or incorporation):

""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." Kounelis v. Sherrer, 529 F.Supp.2d 503, 519 (D.N.J.2008) (citing Mosaid Tech. Inc. v. Samsung Elec. Co., 348 F.Supp.2d 332, 335 (D.N.J.2004)). "Spoliation occurs when a party has intentionally or negligently breached its duty to preserve potentially discoverable evidence," and cannot occur in the absence of such a duty. Id., at 518-19."

Duty to preserve is drawn from 2nd Circuit as well as Federal District court decisions from California, Delaware and New Jersey:

"A duty to preserve evidence arises when there is knowledge of a potential claim. Winters v. Textron, Inc., 187 F.R.D. 518 (M.D.Pa.1999). A potential claim is generally deemed cognizable in this regard when litigation is pending or imminent, or when there is a reasonable belief that litigation is foreseeable. For instance, a duty to preserve evidence can arise many years before litigation commences; imminency is sufficient to create the duty, but it is not a requirement. See Kronish v. United States, 150 F.3d 112, 126 (2d Cir.1998); In re Napster, Inc. Copyright Litig., 462 F.Supp.2d 1060, 1068 (N.D.Cal.2006); In re Quintus Corp., 353 B.R. 77, 80-84 (Bankr.D.Del.2006), aff'd, 2007 WL 4233665 (D.Del.2007). As soon as a potential claim is thus identified, a party is under a duty to preserve evidence which it knows, or reasonably should know, is relevant to the future litigation. Nat'l Ass'n of Radiation Survivors v. Turnage, 115 F.R.D. 543, 556-57 (N.D.Cal.1987)."


Reasonableness Test for Document Retention Policies

Borrowing precedent from the U.S. Court of Appeals for the Eighth Circuit, the Court provides an interesting twist on document retention policy and document destruction, and appears to endorse an approach in which a court may determine if a document retention policy is prima facie reasonable

"If a party has a record retention policy, it is appropriate for the court to determine "whether the policy is reasonable considering the facts and circumstances surrounding the relevant documents," or whether it was instituted in bad faith. Lewy v. Remington Arms Co., 836 F.2d 1104, 1112 (8th Cir.1988)."

The Court then notes that once a Court has found a document retention policy reasonable under the circumstances, a Zubulake analysis may then be undertaken:

"Even if the court finds the policy to be reasonable given the nature of the documents subject to the policy, the court may find that under the particular circumstances certain documents should have been retained notwithstanding the policy. For example, if [a party] knew or should have known that the documents would become material at some point in the future then such documents should have been preserved. Thus a [party] cannot blindly destroy documents and expect to be shielded by a seemingly innocuous document retention policy. Gumbs v. Int'l Harvester, Inc., 718 F.2d 88, 96 (3d Cir.1983). Therefore, "[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)."


Imminence Not Required to Trigger Duty to Preserve

The Rambus court acknowledges that a duty to preserve may be triggered well in advance of litigation, as Rambus found out.

“A duty to preserve arises when there is knowledge of a potential claim. Winters v.Textron, Inc., 187 F.R.D. 518 (M.D.Pa.1999). A potential claim is generally deemed cognizable in this regard when litigation is pending or imminent, or when there is a reasonable belief that litigation is foreseeable. For instance, a duty to preserve evidence can arise many years before litigation commences; imminency is sufficient to create the duty, but it is not a requirement. See Kronish v. United States, 150 F.3d 112, 126 (2d Cir.1998); In re Napster, Inc. Copyright Litig., 462 F.Supp.2d 1060, 1068 (N.D.Cal.2006); In re Quintus Corp., 353 B.R. 77, 80-84 (Bankr.D.Del.2006), aff'd, 2007 WL 4233665 (D.Del.2007). As soon as a potential claim is thus identified, a party is under a duty to preserve evidence which it knows, or reasonably should know, is relevant to the future litigation. Nat'l Ass'n. of Radiation Survivors v. Turnage, 115 F.R.D. 543, 556-57 (N.D.Cal.1987).


Dispositive Sanctions

The Rambus court, following 3rd Circuit precedent, notes that:

"Consistent with the analytical framework identified in Schmid, such sanctions are not warranted in the absence of demonstrated bad faith (i.e., the intentional destruction of evidence) and prejudice. With respect to the latter, the imposition of a dispositive sanction should be confined to those cases where the failure to produce " 'materially affect[s] the substantial rights of the adverse party' and is 'prejudicial to the presentation of his case.' " Gates, 167 F.R.D. at 104 ( citing Wilson v. Volkswagen of America, Inc., 561 F.2d 494, 503 (4th Cir.1977))."


So, we have the adoption 8th Circuit standards to determine if a document retention policy is prima facie reasonable, 3rd Circuit spoliation standards require a showing of "bad faith" or "intentional" destruction of evidence, rather than the negligence applied by the 2d Circuit and others.


Burden of Proof to Establish Spoliation

The Rambus court acknowledges that the standard of proof required to prevail in a spoliation claim "is not a matter of settled law in the Third Circuit."
Citing a District Court of Colorado case, the Court decides that "clear and convincing" standard for spoliation mirrors the "clear and convincing"
standard for a finding of inequitable conduct in patent cases:

"Although the court recognizes that requiring clear and convincing evidence for the imposition of dispositive sanctions for spoliation places an onerous burden on the aggrieved party (where the very proof of intent and prejudice arguably has been destroyed), nevertheless, the court concludes that this higher burden can appropriately operate as the clear and convincing burden operates in the patent arena in proving inequitable conduct."

Now, for the Court's decision, and for Rambus, not a pretty result:

"In determining the degree of prejudice suffered by Micron as a result of this spoliation of evidence, Micron has carried its burden under Schmid to prove that the documents destroyed FN58 were discoverable and the type of documents that would be relevant to the instant litigation. More specifically, Micron asserts unenforceability due to patent misuse and violation of the antitrust and unfair competition laws (based in part on Rambus' conduct at JEDEC), as well as inequitable conduct. These are defenses that are illuminated by evidence of a non-public nature, e.g., by internal Rambus documents.FN59 Because the record demonstrates that there were documents relevant to these defenses,FN60 the court concludes that Micron has been prejudiced by Rambus' conduct. That prejudice has been compounded by Rambus' litigation conduct, which has been obstructive at best, misleading at worst."
"In determining which of the potential sanctions for spoliation should be imposed, the court is directed to find the least harsh sanction that serves both to avoid substantial unfairness to Micron but deter such conduct in the future. In reviewing the record, the court concludes that the showing of bad faith is so clear and convincing that the showing of prejudice can be proportionally less. The spoliation conduct was extensive, including within its scope the destruction of innumerable documents relating to all aspects of Rambus' business; when considered in light of Rambus' litigation conduct, the very integrity of the litigation process has been impugned. Sanctions such as adverse jury instructions and preclusion of evidence are impractical, bordering on meaningless, under these circumstances and in the context of a typical jury trial.FN61 Therefore, the court concludes that the appropriate sanction for the conduct of record is to declare the patents in suit unenforceable against Micron. An order will issue."

Link to the decision (from Rambus site): http://investor.rambus.com/downloads/2009-01-09%20Opinion%20on%20Unclean%20Hands.pdf

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Case: Jones v Hawley
Cite: --- F.R.D. ----, 2009 WL 63000 (D.D.C. 2009)
Date: 2009-01-12
Topics: Mutuality of duty to preserve, spoliation, failure to preserve, sanctions, adverse inference, D.C. Circuit Court of Appeals spoliation approach.

Plaintiffs (former TSA employees) alleged that the TSA's loss of a hard drive containing personal information (names, social security numbers, dates of birth, etc.). In an interesting twist, it was the plaintiff's failure to preserve emails and other documents that led the Court to render the following decision. This case shows just how blurry the line can be between spoliation and negligent document withholding or destruction. That blur was in large part caused by defendants' own actions, and, in this blogger's opinion, underscores the importance of mutuality of the duty to preserve:

"1. Failed to preserve and produce documents relevant to their claim, although they admitted that they had such documents in their possession.

"2. Indicated that they had no responsive documents in their response to the defendants' Request to Produce Documents, although their other responses to discovery indicated that they did.

"3. Never searched for documents that the defendants demanded, except for one plaintiff, who limited his search to what he described as information that was "reasonably accessible." Defs. Mot. at 5-6 ( quoting deposition of plaintiff Soulia at 105).

"4. Indicated that they would supplement their responses to the interrogatories but never did."
Plaintiff's position? The missing evidence was "barely relevant" and so no harm or prejudice could be found by plaintiff's failure to keep or produce.

Magistrate Judge Facciola notes plaintiff's:

"[m]isapprehension" that a fundamental purpose of discovery is to secure information that will impeach or contradict an opponent's case."


The Court then finds that:

"Since the plaintiffs have lost information that they were unquestionably required to preserve and produce, the question becomes what remedy is appropriate for the Court to impose."

The Court reminds us that Fed. R. Civ. P. provides no express remedy for spoliation, and then provides a good spoliation sanctions imposition analysis in the District of Columbia Circuit Court of Appeals.

Notably, the Court of Appeals draws on Federal, and not state common law, (in this case, District of Columbia, or Maryland law):

""[i]t is settled beyond all question that at common law the destruction, alteration, or failure to preserve evidence in pending or reasonably foreseeable litigation warrants the finder of fact inferring that the destroyed evidence would have been favorable to the opposing party." Ashford v. E. Coast Express Eviction, No. 06-CV-1561, 2008 WL 4517177, at *2 (D.D.C. Oct. 8, 2008) (citing United Med. Supply Co., Inc. v. United States, 77 Fed. Cl. 257, 263 (2007)). See also Shepherd v. Am. Broad. Cos., 62 F.3d 1469, 1481 (D.C.Cir.1995) (holding that each party has " 'an obligation to preserve and also not to alter documents it knew or reasonably should have known were relevant ... if it knew the destruction or alteration of those documents would prejudice [its opponent]." ') (internal quotations omitted). "[A] court may employ an adverse inference due to a party's 'failure to preserve evidence,' even if deliberate or reckless conduct is not present." More v. Snow, 480 F.Supp.2d 257, 275 (D.D.C.2007) (citations omitted); Miller v. Holzmann, No. 95-CV-1231, 2007 WL 172327, at *3 (D.D.C. Jan. 17, 2007) ("It is the law of this Circuit that a party has an obligation to preserve evidence it knew or reasonably should have known was relevant to the litigation and the destruction of which would prejudice the other party to that litigation."). Before allowing an adverse inference however, "the court should consider the 'degree of negligence or bad faith involved, the importance of the evidence involved, the importance of the evidence lost to the issues at hand, and the availability of other proof enabling the party deprived of the evidence to make the same point." ' Id."


Magistrate Judge Facciola then provides a chart (you can see the chart by clicking the link to the decision below) listing the plaintiff's claims, and quite adroitly explains how each of these claims operates as an admission that "while they once had the relevant documents, they no longer do and therefore never produced them during discovery."

Finding plaintiff's negligence "inexcusable," the Court then ordered the imposition of an adverse inference in connection with those documents not "kept and produced."

In case anyone is curious, plaintiffs were represented by counsel, apparently employed by the American Federation of Government Employees.

Link to the decision: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2007cv0855-39

*****************

Case: Citizens for Responsibility and Ethics in Washington v Exec. Office of the White House
Cite: 07-cv1707; 07-cv-1577 (D.C.D.C.)
Date: 2009-01-15
Topics: Duty to Preserve; emergency relief in connection with ESI preservation; Not your everyday search and document preservation case

In this latest chapter involving the White House emails, Magistrate Judge Facciola faced an issue in connection with which he had limited information, and a very short period of time in which to make a decision based on that limited information. The White House represented to the Court that, in accordance with standing orders of the District Court produce hard drives containing certain ESI (emails) generated by the Executive Office of the President (EOP) between 2003 and 2005. Despite the broad wording of the District Court's order, the EOP represented to Magistrate Judge Facciola on January 14 that it would:

"[p]rovide only upon those divisions whose records are subject to the Federal Records Act ("FRA")3 and not to those subject to the Presidential Records Act ("PRA").4 As a result, they have not and will not fulfill the obligations now imposed by Judge Kennedy's order as to the latter."

The Court notes that the missing emails (apparently retrievable from backup
tapes) to be "at the very heart of this lawsuit, and finds a "profound societal interest in their preservation. They are, after all, the most fundamental and useful contemporary records of the recent history of the President's office."

In what is his signature style, Magistrate Judge Facciola puts the need to preserve the truth in historical perspective:

"If Napoleon was right when he said that he did not care who wrote France's laws if he could write its history, then the importance of preserving the e-mails cannot be exaggerated."

The Court's rationale appears much earlier in the decision:

"To further complicate the matter, the records at issue are not paper records that can be stored but electronically stored information that can be deleted with a keystroke. Additionally, I have no way of knowing what happens to computers and to hard drives in them when one administration replaces another."

With time running out (two days before the Bush-Obama transition) the Court was left with only two choices:

"Moreover, at this point I am between a rock and a hard place. If, despite the defendants' representations, e-mails were transmitted from PRA to FRA agencies and back but I preclude a search for them in the PRA agencies, I will be honoring a representation without having any opportunity to test its correctness. I may therefore fail miserably to preserve the res of this lawsuit based on an untested assertion."

"If, on the other hand, I do not honor the representation and order all computers to be searched, I am at least doing all I can to preserve the res in the only way possible. The importance of doing so easily trumps the costs involved. "

It appears that the EOP attempted to run the clock. Time ran out --- for the
EOP:

"Therefore, defendants must appreciate that the Order I am issuing requires them to search for e-mails in the specified period in both PRA and FRA agencies."

Link to decision: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2007cv1707-105

2009-01-03 Another Reason to Request eDiscovery Bifurcation, Retain an Expert, and Ask and Substantiate Metadata Request

Case: Kingsway Financial Serv, Inc. v. Pricewaterhouse-Coopers LLP
Cite: 2008 WL 5423316, 6 (S.D.N.Y. 2008)
Date: 2008-12-31
Topics: Late request metadata, failure to substantiate request for metadata.

In another decision relying on (the very recent decision in) Aguilar v Dep't Homeland Security, the Kingsway Financial decision provides a nice "what not to do" list for counsel about to engage in eDiscovery.

What should counsel do? First, bifurcate discovery into merits based and eDiscovery tracks. In that way you need not eat up merits based discovery requests (depos, interrogatories, etc.) by engaging in eDiscovery, and vice-versa. Second, any issue or unresolvable dispute may then be addressed much earlier in the discovery cycle. Third, retain a technology expert to assist in early eDiscovery planning and execution.

What is clear from this decision is that plaintiffs neither understood the type of metadata, nor could they articulate a good foundation for the reason metadata was requested in the first place. Now, the Aguilar decision (upon which the Kingsway court relies) does emphasize the importance of metadata (although a general understanding of the criticality of metadata for authentication and admissibility is still a ways off) and repudiates the first Sedona proclamation that most metadata is of no value. Aguilar might easily stand for the proposition that ESI production almost mandates concurrent metadata production.

Here, the Court steps away from that position, and places the burden on the requesting party to (a) request metadata, and presumably in an initial discovery request; (b) identify the type(s) of metadata sought, and (c) provide at least some reason for the request. In this blogger's opinion, the assistance and participation of an expert from the outset of litigation might well have resulted in a different decision (i.e., the production of the metadata sought much earlier in litigation, or perhaps a sanctions hearing for spoliation/negligent evidence destruction) :

"Plaintiffs do not identify the types of metadata they seek nor do they explain why metadata is relevant in this matter. In addition, plaintiffs do not raise any questions about the authenticity of any documents produced by PwC nor do they claim that any document has been improperly “doctored” or modified."

"The nature of metadata and the current state of the law regarding its production are discussed in detail by the Honorable Frank Maas, United States Magistrate Judge, in Aguilar v. Immigration & Customs Enforcement Div. of the United States Dep't of Homeland Sec., 07 Civ. 8224(JGK)(FM), 08 WL 5062700 (S.D.N.Y. Nov. 21, 2008). As Aguilar points out, there are three different types of metadata: (1) substantive metadata; (2) system metadata, and (3) embedded metadata. 08 WL 5062700 at *3-*4. In general, metadata is relevant when the process by which a document was created is in issue or there are questions concerning a document's authenticity; metadata may reveal when a document was created, how many times it was edited, when it was edited and the nature of the edits. In the absence of an issue concerning the authenticity of a document or the process by which it was created, most metadata has no evidentiary value. 08 WL 5062700 at *5.

"In its response, PwC represents that much of the metadata sought by plaintiffs was deleted from PwC's computer system prior to the commencement of this action and no longer exists. With respect to a number of plaintiffs' requests for metadata, PwC sets forth the date and time on which the documents for which metadata was requested were last modified, but no other information."

"In light of the dubious value of metadata and plaintiffs' total failure to explain its relevance to the claims and defenses in this action, plaintiffs' application to compel its production is denied. Given the advanced stage of discovery in this litigation and the absence of any showing that production of metadata would serve any useful purpose, I am left with the strong sense that ordering the production of metadata would not shed any light on any of the claims or defenses in this action. This ruling resolves Items 38, 39, 40, 41, 50, 51." Kingsway Financial Services, Inc. v. Pricewaterhouse-Coopers LLP, 2008 WL 5423316, 6 (S.D.N.Y. 2008)"

2008-12-27 Affirming Aguilar, Court Calls for Competency and Collaboration

Case: Covad Communications Company, v. Revonet, Inc.
Citation: 06-cv-1892 (D.C.D.C. 2008)
Date: December 24, 2008
Topics: eDiscovery, Counsel Cooperation, Competency, Native Format Data, Reasonably Usable, Requester's Choice of Format; Cost Shifting

Link:
https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2006cv1892-65

First, please note the changed format for case reporting. Where possible, I also include links to free access to decisions on-line. Any comments, critiques or suggestions are welcome.

This decision by Magistrate Judge John Facciola of the United States District Court for the District of Columbian, underscores the need for counsel to be competent in matters electronic. Discovery matters, to be precise. This decision also emphasizes the need for counsel to know what it is they request, and be able to articulate that request in such a manner that the Court can divine not only what is requested, but the form and format of production. Magistrate Judge Facciola first points out that the discovery dispute before the Court were served prior to the effective date of amended Fed. R. Civ. P. R 26, and then remarks that disputes like these were what the rules were amended to address.

The Court first notes that the parties never discussed ESI form and format of production:

"This controversy predates that provision, and underscores its importance.See Aquilar v. Immigration and Customs Enforcement Div. of the U.S. Dep't of Homeland Sec., No. 07-CV-8224, 2008 WL 5062700, at *8-9 (S.D.N.Y. Nov. 21,2008) (emphasizing the need for cooperation between counsel in defining the form of production) (citing The Sedona Conference Cooperation Proclamation (2008), available at http://www.thesedona conference.org/dltForm?did=Cooperation_Proclamation.pdf)."

Issues relating to counsel competency (of both parties) never stray far from the Court's analysis:

"It does not appear that Covad and Revonet ever discussed what form this (or any other) production should take. Instead the parties seem to be making assumptions based on each others' behavior: Covad expecting its documents in electronic form because Revonet hired a company to collect electronically stored information, and Revonet assuming that they should produce 35,000 pages of e-mails in hard copy because Covad produced its documents in that format."

Think drafting eDiscovery requests in the post-2006 Fed. R. Civ. P.amendment universe is a cut-and-paste operation? Think again.

"Thus, I am supposed to determine by examining ancient boilerplate - designed for discovery in a paper universe - such nice questions as whether an e-mail, existing in a computer's memory is a "tangible thing" and how e-mails are "maintained in the ordinary course of business." While I have considered a similar provision in depth once before, I see no need to repeat that metaphysical exercise here because it is a waste of judicial resources to continue to split hairs on an issue that should disappear when lawyers start abiding by their obligations under the amended Federal Rules and talk to each other about the form of production. I would much prefer to carry out my duties in accordance with Rule 1, which provides that the rules "should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding." Fed. R. Civ. P.1.

"How inarticulate might be an eDiscovery request?

"Therefore, though Covad's instruction is hopelessly imprecise and Revonet could colorably argue that it should be interpreted to include several different formats, no reasonable person can honestly believe that hard copy is one of them."

What happened here is that the discovery request asked for "tangible things.[see long list in opinion]."maintained in the ordinary course of business." The problem, as discussed by Magistrate Judge Facciola, is that "tangible"and ESI don't play well in the same sandbox (hence the Court's reference to "ancient boilerplate"). The problem presented here was what to do about production of 35,000 additional emails? The producing party wanted to produce in hard copy (think "tangible") and the requesting party, apparently newly sensitized to the world of eDiscovery, now demanded supplemental production in native data format.

Here, the requesting party's saving grace resulted from a combination of judicial practicality (or perhaps mercy) and reference to the actual wording of the request. The requesting party did not request native data format (but instead used the term "tangible thing" - the "ancient boilerplate").It did, however, request that production be made as kept in the "ordinary course of business." The Court points out that the likelihood that Covad kept its 35,000 email trove in paper format in the "ordinary course of business" was a bit more than highly unlikely:

"More importantly, I do not need to parse words because no one is pretending that Revonet prints all of its e-mails or converts them to TIFF files on a daily basis no matter how ephemeral, meaningless or trivial their content.[Footnote omitted] Therefore, though Covad's instruction is hopelessly imprecise and Revonet could colorably argue that it should be interpreted to include several different formats, no reasonable person can honestly believe that hard copy is one of them. For hard copy to be an acceptable format, one would have to believe that Revonet, in its day to day operations, keeps all of its electronic communications on paper. There is no evidence in the record that Revonet operates in this manner, and no suggestion that such a practice would be anything but incredible"

In ordering the supplemental production in native format, the Court took a practical and, imo, fair approach in resolving the issue, but not without some additional poignant observation:

"Therefore, even though I can't say I know what Covad has asked for, I can say what they have not asked for, and that is what they got. "

The subtext of this decision appears to be that while the Court might cut a break to requesting (or producing) parties in some instances, we are rapidly approaching a point where (1) WIAIWYG (what is asked is what you get), and WIRIWYP (what is requested is what you produce), and (2) we shouldn't expect the Courts to act as technology experts in interpreting either ESI discovery requests or responses.The Court also provides a short cost-shifting analysis and decides that no undue burden (justifying a cost-shift) are present in this instance:

"Revonet would have had to incur the cost of privilege review had it produced the e-mails in native format in the first place. That natural burden would not have been shifted because it is presumed that reviewing the data to ascertain whether any of it is privileged must be done by the producing party as a matter of course. Peskoff v. Faber, 251 F.R.D. 59, 61 (D.D.C. 2008) (costs of production should be shifted only if burden is undue because, for example, sources are not reasonably accessible)."

The Court ultimately decides that the parties should share in the additional costs incurred, but with another reference to counsel's competency:

"Since both parties went through the same stop sign, it appears to me that they both should pay for the crash. I will require them to share the cost of the paralegal removing the privileged e-mails, as I have described it, to a cost of no greater than $4,000, i.e., $2,000 each. I expect Revonet to keep a careful record of the time spent and to alert me if there is any risk that the cost will exceed $4,000. At that point (which I hope will not be reached) I will ask Revonet to estimate what it will cost to finish the job and seek the views of counsel as how to cover it.

Characterization of counsel meet-and-confer obligations to discuss nature and format of production as "essential":

"This whole controversy could have been eliminated had Covad asked for the data in native format in the first place or had Revonet asked Covad in what format it wanted the data before it presumed that it was not native. Two thousand dollars is not a bad price for the lesson that the courts have reached the limits of their patience with having to resolve electronic discovery controversies that are expensive, time consuming and so easily avoided by the lawyers' conferring with each other on such a fundamental question as the format of their productions of electronically stored information."

It will be interesting to see how future motions of this type are treated by the Courts.

2008-12-10 Metadata - The New Black - Guidelines from the Southern District of New York


In Aguilar v Immigration and Customs Enforcement Div. of U.S. Dept. of Homeland Security, 2008 WL 5062700 (SDNY November 21, 2008), Judge Maas provides an excellent overview of the discovery process as it relates to metadata, including definitions, and cautionary words to counsel in crafting discovery requests and production, and yes, the dying breath of the Sedona Principles first (dismissive) treatment of metadata.


This November 21, 2008 decision highlights the increasing evidentiary significance accorded by Courts to metadata. It bears keeping in mind that many early decisions held, and until recently, the position of the Sedona Conference, was that most metadata had no value or relevance. In this blogger's view (and in the view of many of my more knowledgeable colleagues) this possession was as incorrect in theory as it was untenable in practice. (As a member of WG1, I wrote to express my (then) contrary views approximately two years ago).

What is also notable is that the Court now eschews Sedona's prior position concerning metadata, and adopts the revised position of the Sedona Principles Comment 12, in substance recognizing that metadata is relevant where it may contain context information and follows the District of Maryland's position that metadata is generally discoverable. What the Court appears to accept is that that metadata provides the context for content, and that context that is necessary for the authentication of digital evidence. (We'll leave discussion of challenges to metadata authenticity for another post).

On a procedural note, the Court finds that although no formal motion to compel was filed (the Southern District of New York's local rules require that a letter be written prior to the filing of a discovery related motion), the Court treated the letter as a motion to compel. In that letter Plaintiff requested that the court compel production of "responsive emails and electronic documents" in TIFF format with corresponding metadata and with "meaningful information" about the metadata fields...

Citing Williams v Sprint, 230 F.R.D. 640 (D. Kan. 2005), the Court first notes that “'As a general rule of thumb, the more interactive the application, the more important the metadata is to understanding the application's output.'”

The Court then describes a spreadsheet application as one whose "interactivity" lies somewhere between a database and a word processing application:

"Thus, while metadata may add little to one's comprehension of a word processing document, it is often critical to understanding a database application. Id.“A spreadsheet application lies somewhere in the middle” and the need for its metadata depends upon the complexity and purpose of the spreadsheet. Id"

After defining metadata generally as "data about data," the Court fleshes out the definition, and then provides a good interpretation of the different categories of metadata. This next section is lengthy but thorough, and borrowing liberally from the Sedona Principles:

"Types of Metadata"

"Metadata, frequently referred to as “data about data,” is electronically-stored evidence that describes the “history, tracking, or management of an electronic document.” Id. at 646. It includes the “hidden text, formatting codes, formulae, and other information associated” with an electronic document. The Sedona Principles-Second Edition: Best Practices Recommendations and Principles for Addressing Electronic Document Production Cmt. 12a (Sedona Conference Working Group Series 2007), http://www.thesedonaconference.org/content/miscFiles/TSC_PRINCP_2nd_ed_607.pdf ( “Sedona Principles 2d” ); see also Autotech Techs. Ltd. P'Ship v. AutomationDirect.com, Inc., 248 F.R.D. 556, 557 n. 1 (N.D.Ill.2008) (Metadata includes “all of the contextual, processing, and use information needed to identify and certify the scope, authenticity, and integrity of active or archival electronic information or records”). Although metadata often is lumped into one generic category, there are at least several distinct types, including substantive (or application) metadata, system metadata, and embedded metadata. Sedona Principles 2d Cmt. 12a; see United States District Court for the District of Maryland, Suggested Protocol for Discovery of Electronically Stored Information 25-28, http://www.mdd.uscourts.gov/news/news/ESIProtocol.pdf ( “Md.Protocol” )."


"a. Substantive Metadata"

"Substantive metadata, also known as application metadata, is “created as a function of the application software used to create the document or file” and reflects substantive changes made by the user. Sedona Principles 2d Cmt. 12a; Md. Protocol 26. This category of metadata reflects modifications to a document, such as prior edits or editorial comments, and includes data that instructs the computer how to display the fonts and spacing in a document. Sedona Principles 2d Cmt. 12a. Substantive metadata is embedded in the document it describes and remains with the document when it is moved or copied. Id. A working group in the District of Maryland has concluded that substantive metadata “need not be routinely produced” unless the requesting party shows good cause. Md. Protocol 26. "

"b. System Metadata"

" System metadata “reflects information created by the user or by the organization's information management system.” Sedona Principles 2d Cmt. 12a. This data may not be embedded within the file it describes, but can usually be easily retrieved from whatever operating system is in use. See id. Examples of system metadata include data concerning “the author, date and time of creation, and the date a document was modified.” Md. Protocol 26. Courts have commented that most system (and substantive) metadata lacks evidentiary value because it is not relevant. See Mich. First Credit Union v. Cumis Ins. Soc'y, Inc., No. Civ. 05-74423, 2007 WL 4098213, at *2 (E.D.Mich. Nov. 16, 2007); Ky. Speedway, LLC v. Nat'l Assoc. of Stock Car Auto Racing, No. Civ. 05-138, 2006 WL 5097354, at *8 (E.D.Ky. Dec. 18, 2006); Wyeth v. Impax Labs., Inc., 248 F.R.D. 169, 170 (D.Del.2006). System metadata is relevant, however, if the authenticity of a document is questioned or if establishing “who received what information and when” is important to the claims or defenses of a party. See Hagenbuch v. 3B6 Sistemi Elettronici Industriali S.R.L., No. 04 Civ. 3109, 2006 WL 665005, at *3 (N.D.Ill. Mar. 8, 2006). This type of metadata also makes electronic documents more functional because it significantly improves a party's ability to access, search, and sort large numbers of documents efficiently. Sedona Principles 2d Cmt. 12a."

"c. Embedded Metadata"

"Embedded metadata consists of “text, numbers, content, data, or other information that is directly or indirectly inputted into a [n]ative [f]ile by a user and which is not typically visible to the user viewing the output display” of the native file. Md. Protocol 27. Examples include spreadsheet formulas, hidden columns, externally or internally linked files (such as sound files), hyperlinks, references and fields, and database information. Id. This type of metadata is often crucial to understanding an electronic document. For instance, a complicated spreadsheet may be difficult to comprehend without the ability to view the formulas underlying the output in each cell. For this reason, the District of Maryland working group concluded that embedded metadata is “generally discoverable” and “should be produced as a matter of course.” Id. at 27-28."

The Court then offers an analysis of the discoverability of metadata in the Federal Courts:

"Federal Rules"

"Metadata is not addressed directly in the Federal Rules of Civil Procedure but is subject to the general rules of discovery. Metadata thus is discoverable if it is relevant to the claim or defense of any party and is not privileged. Fed.R.Civ.P. 26(b) (1). Additionally, “[f]or good cause, the court may order discovery of any matter [including metadata] relevant to the subject matter involved in the action.” Id. The “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Id. The discovery of metadata is also subject to the balancing test of Rule 26(b)(2)(C), which requires a court to weigh the probative value of proposed discovery against its potential burden."

Know It, Use It (the Request) or Lose It

OK, so most, if not all, metadata is discoverable. The Court then makes a point, or warning, to parties to make sure to know what to request, and how to request it. This decision points out how a party may actually waive its right to obtain otherwise perfectly discoverable metadata by not availing itself of its right to request form and format of production. Fail to do this in the first instance, and you cede to the producing party the right to produce in any "reasonably usable" format, which may or may not include metadata, or the type of metadata sought. See the last line of this excerpt:

"Although metadata is not specifically referenced, Rule 34 of the Federal Rules of Civil Procedure addresses the production of ESI. Fed.R.Civ.P. 34(a)(1)(A), (b)(2)(E). Under the Rule, a requesting party may specify a form of production and request metadata. Fed.R.Civ.P. 34(b)(1)(C). (A typical request might be to produce Word documents in TIFF format with a load file containing the relevant system metadata.) The responding party then must either produce ESI in the form specified or object. If the responding party objects, or the requesting party has not specified a form of production, the responding party must “state the form or forms it intends to use” for its production of ESI. Fed.R.Civ.P. 34(b)(2)(D). Thereafter, if the requesting party objects and suggests an alternative form, the parties “must meet and confer under Rule [37(a)(1) ] in an effort to resolve the matter before the requesting party can file a motion to compel.” Fed.R.Civ.P. 34(b), advisory committee's note, 2006 amendment. "

"If the requesting party does not specify a form for producing ESI, the responding “party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.” Fed.R.Civ.P. 34(b)(2)(E)(ii). Although a party may produce its ESI in another “reasonably usable form,” this does not mean “that a responding party is free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation.” Fed.R.Civ.P. 34(b), advisory committee's note, 2006 amendment. In particular, if the ESI is kept in an electronically-searchable form, it “should not be produced in a form that removes or significantly degrades this feature.” Id.; see also Payment Card, 2007 WL 121426, at *4 (documents stripped of metadata allowing searches do not comply with Rule 34(b)). The Federal Rules also specify that a “party need not produce the same [ESI] in more than one form.” Fed.R.Civ.P. 34(b)(2) (E)(iii)."

The Court takes pains to discuss Sedona's concession as to the importance of metadata, although it is odd that metadata's importance in digital evidence authentication is not directly address (although that is perhaps what Sedona means by "accessibility and functionality"):

"Sedona Principles"

"The Sedona Conference (“Conference”), a nonprofit legal policy research and education organization, has a working group comprised of judges, attorneys, and electronic discovery experts dedicated to resolving electronic document production issues. Since 2003, the Conference has published a number of documents concerning ESI, including the Sedona Principles. Courts have found the Sedona Principles instructive with respect to electronic discovery issues. See, e.g., Autotech Techs. Ltd. P'Ship, 248 F.R.D. at 560; Williams, 230 F.R.D. at 652."

"In the first edition of the Sedona Principles, the Conference stated that “unless it is material to the resolution of a dispute, there is no obligation to ... produce metadata absent agreement of the parties or order of the court.” The Sedona Principles: Best Practices Recommendations and Principles for Addressing Electronic Document Production Principle 12 (Sedona Conference Working Group Series 2005) ( “Sedona Principles 1st” ). The Conference further noted that because most “metadata has no evidentiary value” and the time and money spent reviewing it would be a waste of resources, there should be a “modest legal presumption” against the production of metadata. Id. Cmt. 12a. The Conference nevertheless observed that if metadata is relevant, it should be produced. Id."

"The foreword to the second edition of the Sedona Principles notes that in revising the principles, “[p]articular attention [was] given to updating the language and commentary on Principle 12 (metadata).” Sedona Principles 2d Foreword. Significantly, Principle 12 and the commentaries accompanying it were revised to remove any presumption against the production of metadata. Principle 12 now reads:

'Absent party agreement or court order specifying the form or forms of production, production should be made in the form or forms in which the information is ordinarily maintained or in a reasonably usable form, taking into account the need to produce reasonably accessible metadata that will enable the receiving party to have the same ability to access, search, and display the information as the producing party where appropriate or necessary in light of the nature of the information and the needs of the case.' Sedona Principles 2d Principle 12 (emphasis added). Thus, in the first edition of the Sedona Principles the Conference seemed to focus solely on the relevancy of metadata; in the second edition the Conference placed greater weight on the enhanced accessibility and functionality that metadata provides to the recipients of ESI.The commentary to Principle 12 also was expanded to provide criteria for deciding whether metadata should be produced in a given case. The commentary advises parties to consider: (i) “what metadata is ordinarily maintained”; (ii) the relevance of the metadata; and (iii) the “importance of reasonably accessible metadata to facilitating the parties' review, production, and use of the information.” Id. Cmt. 12a. In selecting a form of production, the two “primary considerations” should be the need for and probative value of the metadata, and the extent to which the metadata will “enhance the functional utility of the electronic information.” Id. Cmt. 12b."

The Court then notes that other court decisions have generally ordered the production of metadata sought in an initial document production request where the party has not yet produced documents in any form:

"There is a clear pattern in the case law concerning motions to compel the production of metadata. Courts generally have ordered the production of metadata when it is sought in the initial document request and the producing party has not yet produced the documents in any form. SeePayment Card. 2007 WL 121426, at *4 (directing production of metadata for any documents not yet produced); Hagenbuch, 2006 WL 665005, at *4 (granting motion to compel production in native form); In re Priceline.com, 233 F.R.D. at 91 (production ordered in TIFF format with corresponding searchable metadata databases). But see Mich. First Credit Union, 2007 WL 4098213, at *2 (court denied production despite timely request for metadata because it was not relevant and production would be unduly burdensome). On the other hand, if metadata is not sought in the initial document request, and particularly if the producing party already has produced the documents in another form, courts tend to deny later requests, often concluding that the metadata is not relevant. See Autotech Techs., 248 F.R.D. at 559-60 (court refused to compel production of metadata not sought in initial request); D'Onofrio v. SFX Sports Group, Inc., 247 F.R.D. 43, 48 (D.D.C.2008) (same); Payment Card, 2007 WL 121426, at *4 (denying motion to compel metadata for documents already produced in TIFF format because another production would be unduly burdensome); Ky. Speedway, 2006 WL 5097354, at *8 (motion to compel production of metadata denied when request first came seven months after production); Wyeth, 248 F.R.D. at 171 (documents produced in TIFF format were sufficient since parties never agreed on form of production);. But see Williams, 230 F.R.D. at 654 (ordering production of Excel spreadsheets with metadata even though no request had been made initially because producing party should reasonably have known that metadata was relevant)."

The Court sums it up quite nicely: When it comes to requesting metadata, no ask, no get:

"In sum, as a recent article has noted, if a party wants metadata, it should “Ask for it. Up front. Otherwise, if [the party] ask[s] too late or ha[s] already received the document in another form, [it] may be out of luck.” Adam J. Levitt & Scott J. Farrell, Taming the Metadata Beast, N.Y.L.J., May 16, 2008, at 4. Hagenbach illustrates the wisdom of this advice. In that patent infringement suit, the plaintiff demanded electronic document production in native form in his first document request. 2006 WL 665005, at *1 (request for “identical, electronic copies” of the documents). The defendants rejected this request and produced the documents in TIFF format without metadata. Id. The court noted that the TIFF documents did not contain such relevant information as the creation and modification dates of documents, email attachments and recipients, and other metadata. Id. at *3. The court also observed that the metadata was relevant to the plaintiff's infringement claim because it “will allow him to piece together the chronology of events and figure out, among other things, who received what information and when.” Id. The court therefore ordered production in native form despite the fact that the defendants could not Bates stamp the documents and had already made a production. Id. at *4.

"By comparison, in Autotech Technologies, the court denied a motion to compel the production of metadata for Word documents after the plaintiff had already produced the documents in both PDF and paper format. 248 F.R.D. at 557. In that case, the initial production request did not specify a form for production. As the court noted, the plaintiff therefore could have produced its documents in the form in which they were ordinarily maintained or in a reasonably usable form. Id. at 558. In concluding that production in PDF form constituted a reasonably usable form, the court relied heavily upon the defendant's failure to ask for metadata at the outset. Id. at 559-60. The court stated that it “seems a little late to ask for metadata after documents responsive to a request have been produced in both paper and electronic format.” Id. at 559. The court also noted that, “[o]rdinarily, courts will not compel the production of metadata when a party did not make that a part of its request.” Id. It concluded that the defendant “was the master of its production requests; it must be satisfied with what it asked for.” FN5 Id . at 560."

Footnote 5

Footnote 5 of this decision is notable, because it explains that prior decisional authority (here, Autotech Techs placed reliance on the first Sedona Principles addressing the importance of metadata:

"To bolster its conclusion, the court in Autotech Technologies relied on the “modest” presumption against the production of metadata stated in the Sedona Principles 1st. Autotech Techs., 248 F.R.D. at 560. As noted above, that presumption has been abandoned in the Sedona Principles 2d."

eDiscovery: A Party Driven Process -The Call for Cooperation:

The Court then examines the emerging approach to the eDiscovery process and dispute resolution, placing the burden of resolving issues relating to metadata production squarely upon the parties' shoulders:

"The Federal Rules of Civil Procedure, case law, and the Sedona Principles all further emphasize that electronic discovery should be a party-driven process. Indeed, Rule 26(f) requires that the parties meet and confer to develop a discovery plan. That discovery plan must discuss “any issues about disclosure or discovery of [ESI], including the form or forms in which it should be produced.” Fed.R.Civ.P. 26(f)(3)(C) (emphasis added). In fact, the commentary to the rule specifically notes that whether metadata “should be produced may be among the topics discussed in the Rule 26(f) conference.” Fed.R.Civ.P. 26(f) advisory committee's note, 2006 amendment. As the commentary further observes, early “identification of disputes over the forms of production may help avoid the expense and delay of searches or productions using inappropriate forms.” Id. Thus, at the outset of any litigation, the parties should discuss whether the production of metadata is appropriate and attempt to resolve the issue without court intervention."

"Likewise, courts have emphasized the need for the parties to confer and reach agreements regarding the form of electronic document production before seeking to involve the court. See, e.g ., Scotts Co. LLC v. Liberty Mut. Ins. Co., No. 2:06-CV-899, 2007 WL 1723509, at *4 (S.D. Ohio June 12, 2007) (refusing to decide whether metadata need be produced because it was unclear “whether the parties have fully exhausted extra-judicial efforts to resolve” the dispute); Ky. Speedway, 2006 WL 5097354, at *8 (“metadata ... should be addressed by the parties in a Rule 26(f) conference”); Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228, 245 (D.Md.2005) (“counsel have a duty to take the initiative in meeting and conferring to plan for appropriate discovery of [ESI including metadata] at the commencement” of thec ase).
The Sedona Principles also stress the need for the parties to resolve issues concerning metadata. As the Conference explains, the purpose of the amended Federal Rules is “to require parties, not courts, to make the tough choices that fit the particular discovery needs of a case.” Sedona Principles 2d Cmt. 12c. This is appropriate because it is not the court but the parties who have the greatest knowledge of the documents in a case and whether the metadata accompanying those documents is relevant. Indeed, the Conference recently has issued a “Cooperation Proclamation,” in which it stresses that the Federal Rules are a mandate that counsel act cooperatively in resolving discovery issues. See Sedona Conference Cooperation Proclamation 2 (2008), www.thesedonaconference.org/content/miscFiles/Cooperation_Proclamation.pdf."

2008-12-02 Fed. R. Civ. P. 26(g) Used as Basis for Imposing Discovery Abuse Sanctions on Counsel

Case: Name:In re Simonson v. Global FInancial Solution, LLC
Citation: 2008 WL 4830807 (Bktpcy. W.D. Wash. 2008)
Date: 2008-10-27

In this Bankruptcy court adversary proceeding from the Western District of Washington, the Court finds that the counsel for the Debtors engaged in discovery abuse by withholding relevant documents from the Trustee. There was no motion to compel filed. The Court imposed sanctions against Debtors' counsel (but not the Debtor), but did not use either Fed. R. Civ. P. Rule 37 (remember, no MTC was filed) or its inherent powers as a basis for sanctions imposition. Eschewing both Rule 37 and inherent powers, the Court found that Debtors' counsel had violated the attorney certification requirement imposed by Fed. R. Civ. P. 26(g)m and cited that violation as ample substantiation for the imposition of sanctions (payment of Trustee's attorneys fees and costs).

In an interesting exercise of recursivity, the Bankruptcy Court draws from a Washington State precedent, which in turn draws its reasoning from the Federal Rules of Civil Procedure.

Relevant Excerpts:

"Although federal law and the Federal Rules of Civil Procedure apply to this case, a Washington Supreme Court decision, Washington State Physicians Insurance Exchange & Association v. Fisons Corp., 122 Wash.2d 299, 858 P.2d 1054 (1993), provides additional guidance as to how the above described rules should be applied. In addressing whether the lower court should have awarded sanctions against a drug company for discovery abuse, the court held that the inherent power of the court to sanction should not be used where other court rules more properly apply. The court further held that the sanction provision of Washington Civil Rule 37 should not be applied where the more specific provisions of Rule 26 better fit the situation. The court went on to construe Washington Civil Rule 26(g), which is virtually identical to Rule 26(g), Fed.R.Civ.P., looking to federal law for guidance. The court concluded after reviewing federal authorities that “[s]ubjective belief or good faith alone no longer shields an attorney from sanctions under the rules,” that intent need not be shown before sanctions are mandated, and a motion to compel compliance with the rules is not a prerequisite to a sanctions motion. Id. at 1078.The court held that in determining whether an attorney has complied with the rule, the trial court should consider all of the surrounding circumstances, the importance of the evidence to its proponent, and the ability of the opposing party to formulate a response or comply with the request.

"The Trustee's Right to Compensation Under Rule 26(g).

Rule 26(g), Fed.R.Civ.P., applies to the circumstances at issue in this case. Thus, there is no need for the Court to utilize Rule 37 or its inherent powers to issue sanctions. Having found that Herman Recor was not substantially justified in failing to provide discovery to the Trustee, Rule 26(g) requires the Court to award sanctions to the Trustee, including reasonable attorneys' fees caused by the violation.

It should be noted that the Trustee has not sought any sanctions against the Levenhagens. Mr. Levenhagen produced documents promptly and completely. If anything, the Levenhagens were cast in an uncooperative and negative light by their counsel's failure to turn over documents to the Trustee."

2008-11-24 Digital Evidence Held Not Authenticated and Inadmissible Under Vinhnee Test

The Bankruptcy Court of the Central District of California issued a decision in October following the Ninth Circuit's approach in Vinhnee approach to digital evidence authentication. It bears repeating that in order to have evidence considered by a jury (or a judge, in Bankruptcy court) it must first be authenticated in accordance with Federal Rules of Evidence Rule 901. The Bankruptcy Court in In re Vargas, --- B.R. ----, 2008 WL 4864986 (Bkrtcy.C.D.Cal. 2008) sets forth what must be demonstrated by a party seeking to have its digital evidence admitted.

"The basic elements for the introduction of business records under the hearsay exception for records of regularly conducted activity all apply to records maintained electronically.

1. The business uses a computer.
2. The computer is reliable.
3. The business has developed a procedure for inserting data into the computer.
4. The procedure has built-in safeguards to ensure accuracy and identify errors.
5. The business keeps the computer in a good state of repair.
6. The witness had the computer readout certain data.
7. The witness used the proper procedures to obtain the readout.
8. The computer was in working order at the time the witness obtained the readout.
9. The witness recognizes the exhibit as the readout.
10. The witness explains how he or she recognizes the readout.
11. If the readout contains strange symbols or terms, the witness explains the meaning of the symbols or terms for the trier of fact.

The Vargas Court recognizes that Vinhnee imposes a more rigorous authentication burden on those seeking to admit computer generated information into evidence:

"Under Ninth Circuit law, the fourth requirement subsumes details regarding the computer policy consisting of

(a) control procedures including control of access to the database,
(b) control of access to the program,
(c) recording and logging of changes,
(d) back-up practices, and
(e) audit procedures to assure the continuing integrity of the records.

[In re] Vinhnee, 336 B.R. at 446 (citing EDWARD J. IMWINKELRIED, EVIDENTIARY FOUNDATIONS § 4.03[2] (5th ed.2002)"

2008-11-14 eDiscovery Sanctions Proceeding Permit Deposition of Prior Counsel

In the November 3 decision in Bray & Gillespie Management LLC v. Lexington Ins. Co., 2008 WL 4826115 (M.D.Fla. 2008). Magistrate Judge Spaulding set a full day for what promises to be a spirited reopening of an evidentiary hearing involving a sanctions motion for discovery violations.

The ground rules set for the hearing provide some context as to what might be expected:

"The Federal Rules of Evidence will apply at the hearing" (in a footnote to this sentence, the Court added: "The Court will not accept testimony from counsel of record in a narrative fashion. Therefore, if an attorney for a party will testify, another attorney must be present to conduct the direct examination.")

"2. Conflicts, if any, in the information before the Court regarding when Reed Smith and lawyers affiliated with it has access to the Introspect database containing information sought in discovery in the present case;

3. Responsibility of counsel of record for any sanctionable conduct related to the present motions. See, e.g., Stuart I. Levin & Assocs., P.A. v. Rogers, 156 F.3d 1135, 1141 (11th Cir.1998); see also Comiskey v. JFTJ Corp., 989 F.2d 1007, 1009-10 (8th Cir.1993); Cache La Poudre Feeds, LLC v. Land O'Lakes, Inc., 244 F.R.D. 614 (D.Colo.2007)."

The preceeding paragraph also merited its own footnote:

"At the close of the previous evidentiary hearing, counsel for Plaintiffs submitted that he should have been permitted to present evidence from previous counsel of record regarding good faith conferences among counsel, the meaning of terms in discovery responses, and other information. If counsel for Plaintiffs wish to present such evidence, or other information such as retainer agreements or time records showing the division of work between and among counsel, they may promptly seek permission to depose prior counsel, if necessary, to obtain the information and present it to the Court."

That attorneys engaging in eDiscovery may be expected to testify about the eDiscovery process (and not the merits) should come as no surprise.

2008-11-01 Search Protocol Warfare

In the latest chapter in the discovery dispute between the parties in D'Onofrio v. SFX Sports Group, Inc.,--- F.R.D. ----, 2008 WL 4737202 (D.D.C. 2008) the efficacy of proposed search protocols have (as we have expected) now become the subject to challenge. Magistrate Judge Facciola has no problem resisting the siren song of (and short-circuited an attempt t0 to win an argument by the use) of "techno-babble:"

"Defendants have proposed a protocol which, unfortunately, is highly technical. I made it clear at the hearing that I expected the lawyers to rely upon their obviously competent IT professionals and Mr. Bond to arrive at a protocol that would satisfy those professionals who fully understand what they were doing and produce a document that was easy to understand and use. What I got was a proposed defendants' protocol that is highly restrictive and full of undefined “buzz words.”
Additionally, in one respect the defendants' protocol is incomprehensible. On the crucial question of what will occur if the search yields previously unproduced e-mails, the defendants' protocol indicates that they will be handled “according to the protocol stated in paragraph 2 herein.” Defs.' Prot ¶ 8. But, paragraph 2 says that a Clear Channel employee must be present when the Legato system is accessed and there is no protocol whatsoever in paragraph 2 that makes the reference in paragraph 8 comprehensible."

This (perhaps not so gentle) chiding of the parties by reference to their "obviously competent IT professionals" and their utter failure to arrive at a mutually satisfactory protocol that was "easy to understand and use" speaks not so much to the IT professionals, but to counsel, either for their failure to understand what their IT professionals were doing sufficient to distill it into non-tech-speak, or for their refusal to do so, perhaps in hopes that their respective arguments would win judicial points for technological complexity.

Magistrate Judge Facciola then takes matters into the Court's hands:

"Since I have gotten so little help from counsel, I will create a protocol of my own using as best I can my understanding of the limited agreement that the parties reached when plaintiff's counsel reacted to defendants' proposal."

The Court, after noting that defendant failed to implement a proper litigation hold after receiving notice that plaintiff intended to sue, then rejects defendants' attempts to limit the scope of eDiscovery search, apparently because the court found that defendants had not conducted a proper search in the first instance:

"Defendants have agreed that plaintiffs' expert may search their computer system or individual computers for electronically stored information. Defendants, however, are unfairly and irrationally limiting the scope and potential results of the search to be conducted. They are obliged to permit the plaintiffs' expert to conduct a diligent search of all potential repositories of electronically stored information that are likely to yield information that is responsive to plaintiff's discovery demands. The restrictions they would impose are inconsistent with that responsibility and I reject them."

Judge Facciola then delivers the coup de grace, giving wide search latitude to plaintiff's expert:

"The parties do not even agree on which systems or hard drives are to be searched. They both reference the Legato system, but plaintiffs also seek access to defendants' local servers in the District of Columbia and to any computers that may be recovered. The testimony I have heard convinces me that plaintiff's expert must be permitted to search any depository of electronically stored information that may contain the following electronically stored information: (1) e-mails to or from plaintiff to include e-mails in which her name appears in the “cc” or “bcc” lines; (2) e-mail in which her name is mentioned; (3) electronically stored information created by her; (4) electronically stored information sent to her, again whether sent to her directly or as one of other recipients; (5) electronically stored information in which her name appears, whether her full name or her first or last name or initials."

Operative terms: "...any repository of electronically stored information"

For those thinking that ESI search disputes are outlier events, it is submitted that the following issues will be litigated with increasing frequency.

Link to the decision: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2006cv0687-86