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For Key Employees’ Bad Faith, Intentional Spoliation, Court Imposes Adverse Inference and Monetary Sanctions : Electronic Discovery Law

August 16, 2011 By Leave a Comment

E.I. Du Pont De Nemours & Co. v. Kolon Indus., Inc., No. 3:09cv58, 2011 WL 2966862 (E.D. Va. July 21, 2011)

The court found that defendant breached its preservation duty when key employees intentionally deleted ESI in bad faith.  Acknowledging Kolon’s (insufficient) attempts to place a litigation hold, the court declined to impose default judgment, but ordered sanctions in the form of attorneys’ fees, expenses and costs related to the motion, and an adverse inference instruction.  In so doing, the court rejected arguments that plaintiff suffered no prejudice and that because many of the files were recovered, there was no spoliation.

In this case, plaintiff alleged trade secret misappropriation, theft of confidential business information, conspiracy, and other business torts.  Defendant received plaintiff’s complaint on February 4, 2009.  On February 6th, defendant issued a litigation hold order to certain upper-level employees.  On February 10th, a second litigation hold notice, written in English, was distributed to all employees, most of whom did not speak English.  A third litigation hold was later issued to the IT department, but had little effect on the outcome of the spoliation motion.

Despite knowledge of the relevant complaint and/or receipt of a litigation hold notice, many of defendant’s key employees deleted relevant information from their computers and email accounts.  These deletions were discovered as the result of defendant’s production of several screen shots with handwritten notes that appeared to identify certain files for deletion (e.g., files were marked “Need to Delete,” “Remove All,” “Get Rid Of,” etc.).  Suspicion of spoliation was also raised by the “suspiciously low document production totals” for key employees and the deposition testimony of employees “which assertedly showed that Kolon failed to instruct key employees on their preservation duties. . .”  The extent of the deletions, however, was uncovered only upon the court’s request for additional discovery into the apparent spoliation.  Forgoing the voluminous details of the spoliation, it suffices to say that plaintiff’s expert concluded that defendant’s employees had deleted at least 17,811 files and email items, many of which were highly relevant to the issues of the case.

via For Key Employees’ Bad Faith, Intentional Spoliation, Court Imposes Adverse Inference and Monetary Sanctions : Electronic Discovery Law.

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Timing is Still Everything: Motion for Spoliation Sanctions Denied as Untimely : Electronic Discovery Law

August 7, 2011 By Leave a Comment

Am. Nat’l Prop. & Cas. Co. v. Campbell Ins., Inc., No. 3:08-cv-00604, 2011 WL 3021399 (M.D. Tenn. July 22, 2011)

In this case, the court denied plaintiff’s Motion for Sanctions for Spoliation of Evidence as untimely, citing the facts that it had been 14 months since the alleged spoliation was discovered, that discovery had already closed, and that trial was weeks away.  In reaching its conclusion, the court relied heavily on the summary of the law regarding the timeliness of spoliation motions laid out by the court in Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494 (D. Md. 2009).

Plaintiff learned in May 2010 that defendants had failed to preserve certain emails from a particularly relevant time period which plaintiff believed would have contained “damning” evidence of defendants’ efforts to solicit plaintiff’s customers in violation of their non-compete obligations.  Despite its belief that spoliation had occurred, plaintiff waited until July 6, 2011 to file a motion for sanctions.  By that time, discovery had closed, the deadline for filing discovery motions had passed, and trial was weeks away.

via Timing is Still Everything: Motion for Spoliation Sanctions Denied as Untimely : Electronic Discovery Law.

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Facebook, Myspace, Fair Game as Evidence in Court – Law Blog – WSJ

July 11, 2011 By Leave a Comment

Recent plaintiffs continue to find themselves slapped with evidence from social networking sites that endanger or even completely derail their cases, despite attempts to argue that such information is protected.

We’ve written before about the growing trend of lawyers mining social media sites for evidence against opposing parties, and recent court decisions have affirmed the unprivileged nature of said information.

For instance, both parties to a case asked a district court in Pennsylvania last month to conduct a review of the plaintiff’s social networking profiles to determine what was subject to discovery.

The court proceeded to identify relevant information, such as “photographs and comments suggesting he may have recently ridden a mule,” which the court thought the defense could used to argue against the plaintiff’s claims that a car accident had left him physically and psychologically injured. Read more on this here.

via Facebook, Myspace, Fair Game as Evidence in Court – Law Blog – WSJ.

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Court Rejects Refusal to Issue Litigation Hold Before 26(f) Conference, Orders Litigation Hold on All Evidence Reasonably Related to Pending Litigation : Electronic Discovery Law

July 11, 2011 By Leave a Comment

Haraburda v. Arcelor Mittal USA, Inc., No. 2:11 cv 93, 2011 WL 2600756 (N.D. Ind. June 28, 2011)

In this case, plaintiff came to believe, based on defendant’s comments and refusal to issue a litigation hold, that relevant evidence would be destroyed.  Accordingly, plaintiff moved for an Order to Preserve Evidence.  Following consideration of the relevant factors and upon rejecting defendant’s arguments that plaintiff’s motion was improper prior to the parties’ Rule 26(f) conference, the court granted the motion and ordered defendant to implement a litigation hold on information that may reasonably be related to the pending litigation.

After filing her employment discrimination complaint, plaintiff became alarmed that relevant evidence could be lost when, in response to her inquiry about emails that were deleted without her consent during the EEOC investigation, defendant responded that “files stored on company computers are company property and can be assessed and/or deleted as the company views appropriate.”  Similarly, upon plaintiff’s request for assurance that potentially relevant evidence would be preserved (approximately one month after filing her complaint), defendant responded that “it refused to implement a litigation hold or other process to preserve evidence until after the Rule 26(f) conference” and explained that plaintiff’s request was “premature.”  Accordingly, plaintiff moved for an Order to Preserve Evidence.

via Court Rejects Refusal to Issue Litigation Hold Before 26(f) Conference, Orders Litigation Hold on All Evidence Reasonably Related to Pending Litigation : Electronic Discovery Law.

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Court Reviews Plaintiff’s Facebook Account to Identify Material Subject to Discovery : Electronic Discovery Law

July 1, 2011 By Leave a Comment

Offenback v. L.M. Bowman, Inc., No. 1:10-CV-1789, 2011 WL 2491371 (M.D. Pa. June 22, 2011)

In this case arising from a car accident which the plaintiff claimed resulted in physical and psychological injuries, the parties invited the court to conduct a review of Plaintiff’s social networking accounts “in order to determine whether certain information contained within Plaintiff’s accounts is properly subject to discovery.”  Using Plaintiff’s log-in information, the court reviewed Plaintiff’s Facebook account, including “a thorough review of Plaintiff’s ‘Profile’ postings, photographs, and other information.”  (Plaintiff’s MySpace account was not searched as it had not been accessed since November 2008 and Plaintiff could not locate the log-in information.)  The court then identified potentially relevant information to be produced, including, for example, photos and updates indicating recent motorcycle trips and “photographs and comments suggesting that he may have recently ridden a mule.”  In finding that some of the “public information contained in Plaintiff’s account is properly subject to limited discovery in this case,” the court noted Plaintiff’s acknowledgment that “limited [relevant] ‘public’ information is clearly discoverable under recent case law.”

via Court Reviews Plaintiff’s Facebook Account to Identify Material Subject to Discovery : Electronic Discovery Law.

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DLA Piper Drops Facebook Plaintiff – WSJ.com

June 29, 2011 By Leave a Comment

Paul Ceglia, the man who claims he is entitled to a large stake in Facebook Inc., has been dropped as a client by the law firm DLA Piper, marking the latest twist in a battle over the origins of the social-networking company.

Robert Brownlie, the DLA Piper attorney representing Mr. Ceglia, wouldn’t say why his firm dropped the case. DLA Piper, one of the world’s largest firms, took on the case in April.

Mr. Ceglia has retained a new attorney, San Diego-based Jeffrey Lake, and is also represented by Paul Argentieri. Mr. Argentieri, based in Hornell, N.Y., said DLA Piper’s actions aren’t a setback in the case. “The case is going to get more critically interesting in a hurry for reasons that will be described later,” said Mr. Argentieri. He declined further explanation.

Mr. Ceglia, a New York state wood-pellet salesman, sued Facebook Chief Executive Mark Zuckerberg in 2010. In his complaint, Mr. Ceglia alleged that Mr. Zuckerberg signed a contract in 2003 that gave Mr. Ceglia a stake in the company. Mr. Ceglia alleged he hired Mr. Zuckerberg, then a Harvard University student, to do work on StreetFax.com, an online database with information about street intersections. Mr. Ceglia alleged that as part of that contract, he agreed to invest $1,000 in the development of a Facebook site.

via DLA Piper Drops Facebook Plaintiff – WSJ.com.

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Court Grants Motion to Compel, Orders Forensic Imaging of Defendants’ Computers : Electronic Discovery Law

June 9, 2011 By Leave a Comment

Weatherford U.S., L.P. v. Innis, No. 4:09-cv-061, 2011 WL 2174045 (D.N.D. June 2, 2011)

Plaintiff alleged that a former employee had downloaded its confidential information and used it to “jump start” his own competing company.  Defendant Innis acknowledged that he had downloaded the information, but denied accessing or using it as plaintiff alleged.  Forensic examination of the thumb drive containing the downloaded information contradicted his claims.  Thereafter, plaintiff filed a motion to compel production of  materials previously identified in a subpoena duces tecum and, “to minimize disruption to defendants’ operations and alleviate their concerns about the disclosure of privileged communications,” proposed that an expert of plaintiff’s choosing be allowed to image defendants’ computers at plaintiff’s expense, and that defendants be allowed to screen the imaged documents prior to their production.  Citing Innis’s acknowledgment that he had copied plaintiff’s confidential information and evidence that he had accessed it thereafter, the court granted plaintiff’s motion to compel.

Late in the evening on the day he was terminated, Innis returned to plaintiff’s offices, logged onto the intranet site, and downloaded a number of files onto a thumb drive.  Approximately two weeks later, Innis formed a new, competing oil services company.  Plaintiff filed suit.  Although Innis acknowledged accessing and downloading plaintiff’s files, he claimed that “he did not later open or go through” them.  Plaintiff’s expert’s examination of the original thumb drive contradicted those claims, however.  Thereafter, in furtherance of its motion to compel production of previously subpoenaed documents, plaintiff sought access to defendants’ computers.  Specifically, plaintiff proposed that a forensic expert of its choice be permitted to create a forensic image of defendants’ computers at plaintiff’s expense and that defendants be given an opportunity to review the imaged documents for privilege, etc. before production to plaintiff.  Defendants objected or, in the alternative, proposed that a mutually agreed upon expert be retained “for the court’s benefit” to “shepherd the imaging of computers and the dissemination of any documents obtained.”

via Court Grants Motion to Compel, Orders Forensic Imaging of Defendants’ Computers : Electronic Discovery Law.

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Over 23,000 IP addresses cited in BitTorrent suit | The Digital Home – CNET News

May 10, 2011 By Leave a Comment

A BitTorrent file-sharing case could soon have more than 23,000 defendants.

Back in March, Judge Robert Wilkins of the U.S. District Court for the District of Columbia allowed Nu Image, a production company and the plaintiff in the case against “Does 1 to 6,500,” to start seeking out contact information, including full name and address, related to IP addresses it had already collected.

Those IP addresses, Nu Image said at the time, were “Doe Defendants” who had allegedly pirated copies of last year’s “The Expendables” using the BitTorrent protocol. Sylvester Stallone directed and starred in the film; LA-based Nu Image was involved in its production.

Last week, Nu Image filed another court document that included more than 23,000 IP addresses of people who allegedly pirated the film. If folks who use those IP addresses are sued as part of the case, it could become the biggest BitTorrent-related lawsuit thus far.

This case, filed earlier this year, is one of many that have been or are currently under way against alleged copyright infringers across the U.S.

via Over 23,000 IP addresses cited in BitTorrent suit | The Digital Home – CNET News.

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Court Declines to Hold that Lack of Written Litigation Hold Allows Presumption that Relevant Evidence was Lost or Destroyed : Electronic Discovery Law

May 8, 2011 By Leave a Comment

Steuben Foods, Inc. v. Country Gourmet Foods, LLC, No. 08-CV-561S(F), 2011 WL 1549450 (W.D.N.Y. Apr. 21, 2011)

Relying largely on the holding of Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., defendant argued that plaintiff’s failure to issue a written litigation hold and subsequent failure to produce three allegedly relevant emails allowed for a presumption that relevant evidence was lost, thereby warranting spoliation sanctions.  Declining to adopt such a holding, the court denied defendant’s motion for sanctions absent evidence that plaintiff was responsible for the destruction or loss of any relevant evidence.

Plaintiff in this breach of contract case issued only an oral litigation hold and failed to produce at least three emails, which defendant argued were relevant to the case.  (Defendant received the emails from another defendant in the case.)  Accordingly, based on the holdings of Pension Committee, defendant argued that relevant evidence should be presumed lost, thereby warranting spoliation sanctions.

Beginning its analysis, the court set forth the relevant law of spoliation:

A party bringing a spoliation motion must demonstrate that: (1) the party charged with destroying the evidence had an obligation to preserve it; (2) the records were destroyed with a ‘culpable state of mind’; and (3) the destroyed evidence was relevant to the party’s claim or defense.

Additionally, “[c]ourts have found that actual destruction or loss of relevant documents is a prerequisite for sanctions based on spoliation.”

Here, the court found that “the record fail[ed] to reveal any evidence that Plaintiff was responsible for the destruction or loss of any relevant evidence.”  For example, as to one email identified by the defendant as relevant but not produced, plaintiff argued (without opposition) that the email was merely overlooked for purposes of production.  Moreover, the court reasoned that even if the identified emails had been lost because of preservation oversights, the emails were not relevant to defendant’s defense.

via Court Declines to Hold that Lack of Written Litigation Hold Allows Presumption that Relevant Evidence was Lost or Destroyed : Electronic Discovery Law.

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Defendant’s Failure to Preserve Results in Sanctions, Including Order for Defense Counsel to Search All of Defendant’s Electronic Media and Hard Copy Files for Responsive Information : Electronic Discovery Law

April 12, 2011 By Leave a Comment

Northington v. H&M Int., No. 08-CV-6297, 2011 WL 663055 (N.D. Ill. Jan. 12, 2011); Northington v. H&M Int., No. 08 C 6297, 2011 WL 662727 (N.D. Ill. Feb. 14, 2011)

In this case, plaintiff sought sanctions for defendant’s failure to preserve and resulting failure to produce electronically stored information (“ESI”).  Upon finding that defendant’s efforts to preserve evidence had been “reckless and grossly negligent”, the magistrate judge recommended sanctions, including that defense counsel be required to conduct a thorough search for ESI and hard copy; that the jury be instructed regarding defendant’s failure to preserve; that defendant be precluded from defending itself by asserting an absence of discriminatory statements; and that defendant pay plaintiff’s reasonable costs and fees.  The recommendations were later adopted in full by the District Court.

Following her termination, plaintiff filed a Notice of Charge of Discrimination with the EEOC.  Defendant received notice of that filing five days later.  Thereafter, plaintiff filed suit alleging sexual and racial discrimination and a hostile work environment, among other things.  Specifically, plaintiff implicated the Terminal Manager at the facility at which she was employed and several other employees, including the manager’s girlfriend and her daughter. In the course of discovery, and following defendant’s admission that some potentially relevant ESI had already been lost, plaintiff brought a motion for sanctions for defendant’s failure to preserve.

Sparing the details, of which there are many, it was established that defendant had failed to adequately preserve potentially relevant ESI despite its obligation to do so.  For example, defendant did not issue a litigation hold or contact many of the employees implicated in plaintiff’s complaint until 15 months after the duty to preserve was triggered by its receipt of notice of plaintiff’s EEOC filing.  Nor did defendant immediately notify its information technology department of the need to preserve potentially responsive materials.  As a result of defendant’s failures, potentially responsive information was lost.  For example, following his resignation, the computer of the Terminal Manager was wiped clean, reassigned, and the hard drive was later discarded because of an alleged crash or virus.  The Terminal Manager’s emails were also deleted by the VP of Human Resources in accordance with his “regular business practice” (as were the emails of the manager’s girlfriend—another employee and accused harasser—following her departure from the company).  Another employee’s emails were lost when they were not migrated to a new system.  When steps were finally taken to ensure preservation, the employees implicated by plaintiff’s complaint were asked to search for and identify potentially relevant evidence without oversight.  Moreover, by that time, potentially responsive information had already been lost.

via Defendant’s Failure to Preserve Results in Sanctions, Including Order for Defense Counsel to Search All of Defendant’s Electronic Media and Hard Copy Files for Responsive Information : Electronic Discovery Law.

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