Sanctions

Court Grants Cross Motions for Spoliation Sanctions, Imposes Adverse Inference Against Both Parties : Electronic Discovery Law

December 23, 2011 By Global EDD Group Leave a Comment

Patel v. Havana Bar, Restaurant & Catering, No. 10-1383, 2011 WL 6029983 (E.D. Pa. Dec. 5, 2011)

In this opinion addressing the parties’ cross motions for sanctions, the court ordered an adverse inference for defendants’ failure to preserve relevant video surveillance footage and an adverse inference for plaintiff’s failure to preserve relevant witness statements. For plaintiff’s other discovery violations, including delayed and piecemeal production of witness statements and failure to timely produce a full copy of the relevant police report, as well as for the spoliation of witness statements, the court ordered re-deposition of several witnesses at plaintiff’s expense. The court also awarded defendants’ attorneys fees and costs “for the time and effort they expended in attempting to obtain discovery that they were entitled to receive.”

Plaintiff was injured when he “fell” from a second story balcony/loft at defendants’ bar and restaurant. Whether plaintiff fell or jumped was apparently in dispute. There was also a question as to whether plaintiff was intoxicated at the time of his “fall.”

Defendants recorded video surveillance near the time of plaintiff’s fall which was viewed by the restaurant owner on the night of the accident. He claimed the video did not reveal how the fall occurred. At deposition, the owner explained that he had attempted to copy the video but was unable, despite a call to the system’s provider. He further stated that although the system could print still images, he did not print any. Thus, the video was automatically recorded over and no footage was preserved. The court found that spoliation had occurred. Accordingly, following its identification of the relevant considerations and after noting that “even ‘negligent destruction of relevant evidence can be sufficient to give rise to the spoliation inference,” the court ordered an adverse inference instruction.

via Court Grants Cross Motions for Spoliation Sanctions, Imposes Adverse Inference Against Both Parties : Electronic Discovery Law.

Filed Under: From The News Tagged With: Adverse Inference, Court Grants Cross Motions, Cross, discovery, Imposes, plaintiff, Sanctions, video surveillance

No Sanctions for Failure to Preserve Disaster Recovery Back-up Tapes where Other Preservation Efforts were Reasonable “In the Context of This Case” : Electronic Discovery Law

June 13, 2011 By Global EDD Group Leave a Comment

Gaalla v. Citizens Med. Ctr., No. V-10-14, 2011 WL 2115670 (S.D. Tex. May 27, 2011)

Plaintiffs moved for sanctions based on defendant’s failure to preserve its disaster recovery back-up tapes, which were overwritten every seven or fourteen days, even after the filing of this lawsuit. Further, “as the briefing developed,” plaintiffs “appeared to contend” that even absent a duty to preserve the disaster recovery back-up tapes themselves, “[defendant]’s failure to preserve the back-up tapes in conjunction with the failure to take timely ‘snapshots’… of relevant email accounts, and evidence that certain CMC employees had deleted emails from their account at some point in the past warrant[ed] severe sanctions.”

Relying on Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003), the court articulated the oft-cited premise that “a ‘litigation hold does not apply to inaccessible backup tapes (e.g. those typically maintained solely for the purpose of disaster recovery), which may continued to be recycled on the schedule set forth in the company’s policy.” The court also articulated the exception to this “general rule”: “If a company can identify where particular employee documents are stored on backup tapes, then the tapes storing the documents of ‘key players’ to the existing or threatened litigation should be preserved if the information contained on those tapes is not otherwise available.” In the present case, the court found plaintiffs had not demonstrated that the exception was applicable. Moreover, the court determined that even if a duty to preserve existed and had been breached, no sanctions were warranted absent evidence that defendant acted in bad faith.

The court went on to note that at the outset of litigation defendant issued a litigation hold and in fact took several snapshots of certain employees’ email accounts. Moreover, the “first of the month” backups of defendant’s email system from November 2009 – November 2010 were available and capable of being searched. Reasoning that the parties had not discussed the preservation of back-up tapes until the present motion and citing the well-known opinion, Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010), for the proposition that acceptable preservation efforts turned on reasonableness and proportionality, the court found that defendant took reasonable steps to preserve “in the context of this case.” The court dismissed with one sentence the “speculation” that employees had deleted relevant emails.

via No Sanctions for Failure to Preserve Disaster Recovery Back-up Tapes where Other Preservation Efforts were Reasonable “In the Context of This Case” : Electronic Discovery Law.

Filed Under: From The News Tagged With: Court, Disaster, discovery law, electronic discovery, employee documents, Other, Preserve, Sanctions, ubs warburg llc, zubulake v ubs warburg

Court Rejects “Shifting Duty” Theory of Preservation, Denies Sanctions Absent Showing that Crucial Evidence was Destroyed in Bad Faith : Electronic Discovery Law

April 21, 2011 By Global EDD Group Leave a Comment

Point Blank Solutions, Inc. v. Toyobo Am., Inc., No. 09-6116-CIV, 2011 WL 1456029 (S.D. Fla. Apr. 5, 2011)

Plaintiffs sought sanctions for defendants’ alleged spoliation of evidence, including email correspondence, communications with other body armor manufacturers, and internal communications, among other things. Finding that plaintiffs failed to show that crucial evidence was destroyed in bad faith, as is required for an adverse inference in the 11th Circuit, the court denied plaintiffs’ motion for sanctions.

Defendants manufactured Zylon, a product used by plaintiffs and other manufacturers in the production of body armor. In June 2003, a 100% Zylon vest manufactured by Second Chance Body Armor (a non-party to the present litigation) failed when a police officer was shot. Following the failure of the vest, defendants hired a PR firm to assist with messaging, etc. surrounding possible litigation, although none had yet been initiated. In November 2003, defendants were “sued across the county in numerous cases involving Zylon-containing vests” (although, apparently, none of these suits involved the plaintiffs in the present action) and the government initiated its own investigation of Zylon-containing body armor. Also in November 2003 defendants’ counsel requested a list of documents in connection with litigation and an oral litigation hold was issued, although the scope of the hold was not definitively ascertained. In January 2004 defendants were served with a request for production from the Massachusetts AG which sought copies of all correspondence with certain body armor manufacturers, including plaintiffs. A similar request was issued from a Michigan state court in July 2004. In April 2004, defendants and Armor Holdings, a body armor manufacturer, were jointly sued in a class action lawsuit. In August 2004, defendants were served with a government subpoena seeking evidence related to defendants’ communications with vest manufacturers other than Second Chance (which would have included plaintiffs). Despite all of this, defendants maintained that litigation with plaintiffs was not anticipated until at least 2006 (and thus no duty to preserve existed until that time), in large part because until that time, plaintiffs continued to “tout the merits of Zylon.”

via Court Rejects “Shifting Duty” Theory of Preservation, Denies Sanctions Absent Showing that Crucial Evidence was Destroyed in Bad Faith : Electronic Discovery Law.

Filed Under: From The News Tagged With: Armor, armor holdings, body, class action lawsuit, Denies, discovery law, duty, electronic discovery, Sanctions, second chance body armor

Court Sanctions Plaintiff and Counsel for Misuse of Discovery Process, Including Failing to Reveal That Relevant Cell Phones were Discarded : Electronic Discovery Law

March 14, 2011 By Global EDD Group Leave a Comment

Moreno v. Ostly, No. A127780, 2011 WL 598931 (Cal. Ct. App. Feb. 22, 2011)

After initially resisting discovery, plaintiff produced a laptop and cellular phone for examination. Upon inspection, it was discovered that neither device was in use during the relevant time period. Moreover, the relevant devices were no longer in plaintiff’s possession. When challenged as to why this was not disclosed initially, counsel explained that he was torn between his “competing duties” of protecting his client and candor to the court. Rejecting plaintiff’s and her counsel’s explanations, the court entered monetary sanctions against them. On appeal, the sanctions were affirmed.

In this case in which plaintiff alleged sexual harassment, retaliation, and failure to pay back wages, defendants sought to discover relevant emails and text messages sent between plaintiff and her alleged harasser and specifically requested production of plaintiff’s computer and cell phone for examination. Plaintiff objected, arguing that the discovery was overly broad. Following a court order to produce plaintiff’s personal computer and cell phone, however, plaintiff’s counsel agreed to deliver them to defendants. Upon inspection of the devices produced, defendants discovered that neither was from the relevant time period and that, in fact, the cellular phone had not even been manufactured until after the relevant period had ended. When challenged, plaintiff’s counsel indicated that “he always understood” the request to be for the devices currently in plaintiff’s possession. When pressed to identify how many computers and cell phones had been used during the relevant period, when plaintiff used them, and what happened to them, plaintiff’s counsel took the position that defendants would have to conduct further discovery. Thereafter, defendants filed a motion for sanctions.

It was eventually revealed that plaintiff used two different cell phones during the relevant period but that neither remained available for inspection. Plaintiff admitted that one had been discarded but, as the court noted in its analysis, it remained “unclear” what had happened to the other. For his part, counsel stated that he had not revealed what he had learned from his client about her cell phone because of attorney-client privilege. Expanding upon that explanation at a hearing on the issue, counsel explained that “he felt he had a ‘competing set of duties’”, namely his obligation to protect his client, who could be accused of spoliation, and his duty of candor to the court and opposing counsel and that he “felt like he was walking a tightrope” trying to advocate for his client “while at the same time be[ing] candid.”

via Court Sanctions Plaintiff and Counsel for Misuse of Discovery Process, Including Failing to Reveal That Relevant Cell Phones were Discarded : Electronic Discovery Law.

Filed Under: From The News Tagged With: cell, client, court sanctions, discovery law, electronic discovery, monetary sanctions, phone, plaintiff, relevant time period, Sanctions

No Sanctions for Destruction of Data Resulting from Mistaken Belief that Computers had been Imaged : Electronic Discovery Law

March 14, 2011 By Global EDD Group Leave a Comment

Fed. Trade Comm’n v. First Univ. Lending, LLC, No. 09-82322-CIV, 2011 WL 673879 (S.D. Fla. Feb. 17, 2011)

Relevant data was lost when a group of computers was scrubbed and sold by defendants with the permission of the court-appointed Receiver. The permission was given, on the condition that the computers were scrubbed, because of the Receiver’s mistaken belief that all relevant computers had been imaged. As a result of the loss of data, defendants filed a motion for spoliation sanctions for what they described as “the FTC’s bad-faith destruction of Defendants’ computer systems.” For the reasons discussed below, defendants’ motion was denied.

In this case, defendants came under investigation by the FTC for their mortgage modification practices. In the course of that investigation, a temporary Receiver was appointed who subsequently took control of defendants’ business premises. The court also imposed a preliminary injunction which mandated the preservation of relevant evidence.

To summarize broadly, in the course of subsequent discovery, the FTC sought to image defendants’ relevant computers, including all of their servers which, pursuant to FTC protocol, were required to be imaged. Defendants were not forthcoming about the existence of several servers, however, and images of those computers were not taken. Later, because of the Receiver’s mistaken belief that all of defendants’ computers had been imaged, defendants were given permission (by an agent of the Receiver) to do “what it wished” with a group of computers but were specifically instructed to scrub the computers before transferring them to a third party. (The court attributed the Receiver’s mistaken belief that all computers had been imaged to the testimony of an FTC investigator which left the impression that they had, and which the court concluded had been overheard by an agent of the Receiver.) Accordingly, the computers were scrubbed by the defendants and sold. As a result, and because not all of the computers had been imaged, relevant data was lost. Defendants subsequently moved for the court to enjoin prosecution or, alternatively, for spoliation sanctions based on the loss of that data which defendants claimed was vital to their defense. Specifically, defendants argued that sanctions were warranted for “the FTC’s bad-faith destruction of Defendants’ computer systems” reasoning that the destruction should not be attributed to the defendants “because the Receiver’s agent instructed Defendants to scrub the computer system.”

via No Sanctions for Destruction of Data Resulting from Mistaken Belief that Computers had been Imaged : Electronic Discovery Law.

Filed Under: From The News Tagged With: belief, computer, Court, discovery law, Electronic, mistaken belief, modification practices, preliminary injunction, Sanctions, trade comm

PODCAST: Surveying Sanctions in E-Discovery Cases in 2010 and Judicial Reactions || ESIBytes

February 8, 2011 By Global EDD Group Leave a Comment

Listen to Karl Schieneman, Director of Analytics and Review with JurInnov talk with the Honorable James C. Francis U.S. Magistrate Judge from the Southern District of NY since Oct, 1985, the Honorable Richard Sankovitz from Branch 29 of the Milwaukee County Circuit Court, Dan Willoughby, a partner at King & Spaulding and co-author of “Sanctions for E-Discovery Violations: By The Numbers,” and well known E-Discovery plaintiff lawyer James A. Batson from Liddle & Robinson. We will be talking about trends in the area of e-discovery sanctions. Given the variety in backgrounds the different panelists possess, this should be a very interesting and lively discussion as we try to figure out what will happen next in the world of E-Discovery Sanctions and how best to avoid them given what we know today.

via Surveying Sanctions in E-Discovery Cases in 2010 and Judicial Reactions || ESIBytes.

Filed Under: From The News Tagged With: ESIBytes, honorable james, honorable richard, Judicial, magistrate judge, milwaukee county circuit court, plaintiff lawyer, Reactions, review, Sanctions

Sanctions Over e-Discovery Increase, More Oversight Needed

January 17, 2011 By Global EDD Group Leave a Comment

e-Discovery is Only as Good as its Oversight

Theoretically, e-Discovery should establish a workflow so that data can be searched, collected, reviewed and analyzed in a manner that is both efficient and effective. However, considering that companies have more data than ever to comb through and classify, as well as conflicts between those implementing the e-Discovery infrastructure and those managing the workflows, e-Discovery isn’t always the magic bullet many believe it to be.

According to the study authors, one of the reasons that sanctions may be increasing is that often “more attention is focused on e-discovery than on the merits with a motion for sanctions an increasingly common filing.” Additionally, of the cases in which sanctions were awarded, the most common misconduct was failure to preserve ESI.

While the study doesn’t offer much advice about how e-Discovery solutions can help solve the problem, it does highlight the need for more uniform standards and guidelines to steer counsel through the complex tasks of discovery.

Ultimately, no matter the e-Discovery platform in use, companies need to take more control of how data is managed across the EDRM. Like most tools, e-Discovery is not magic, but if used effectively, it can help to manage risk and limit sanctions.

via Sanctions Over e-Discovery Increase, More Oversight Needed.

Filed Under: From The News Tagged With: discovery, discovery platform, discovery solutions, edrm, isn, magic bullet, motion for sanctions, Oversight, Sanctions, study

eDiscovery analysis reveals companies struggle most with preservation | Messaging Architects

December 9, 2010 By Global EDD Group Leave a Comment

Companies are continuing to struggle with the preservation stage of the eDiscovery process, according to the results of a data management company’s analysis of 84 prominent cases.

The firm studied litigation that occurred between January 1 and October 31 of this year and found failure to follow email archiving best practices was a prevailing trend.

Thirty-nine percent of cases studied dealt with sanctions. Of those, 49 percent pertained to preservation and spoliation issues. Another 2 percent of cases addressed preservation and spoliation issues, but not in terms of sanctions.

All told, sanctions were levied in 23 of the 33 cases in which they were addressed, according to the report.

“Information management and discovery protocols and processes are far from clear for most organizations,” said Michele Lange, an eDiscovery expert with the company that conducted the analysis.

via eDiscovery analysis reveals companies struggle most with preservation | Messaging Architects.

Filed Under: From The News Tagged With: ediscovery, firm, management company, Messaging, October, october 31, percent, prevailing trend, Sanctions, spoliation

Le transfert de données à l’étranger – CNIL – Commission nationale de l’informatique et des libertés

October 25, 2010 By Global EDD Group Leave a Comment

Qu’est-ce qu’un transfert de données personnelles?

On parle de transfert de données personnelles lorsque des données personnelles sont transférées depuis le territoire européen vers des pays situés en-dehors de l’Union européenne.

Ces transferts sont interdits sauf :

Si le transfert a lieu vers un pays reconnu comme “adéquat” par la Commission européenne.
C’est le cas du Canada, de la Suisse, de l’Argentine, des territoires de Guernesey, de Jersey et de l’Isle de Man ou,
Si des Clauses Contractuelles Types, approuvées par la Commission européenne, sont signées entre deux entreprises ou,
Si des Règles internes d’entreprises (BCR) sont adoptées au sein d’un groupe ou,
Si dans le cas d’un transfert vers les États-Unis, l’entreprise destinataire a adhéré au Safe Harbor ou,
Si l’une des exceptions prévues par l’article 69 de la loi Informatique et Libertés est invoquée
Les sanctions encourues en cas de non respect des règles en matière de transferts sont de 300 000 euros d’amende et de 5 ans d’emprisonnement. (Articles 226-16, 226-16 A et 226-22-1 du Code pénal)

via Le transfert de données à l’étranger – CNIL – Commission nationale de l’informatique et des libertés.

Filed Under: From The News Tagged With: cas, CNIL, commission nationale, donnée, exceptions, informatique, isle de man, lieu, Sanctions, transfert

Law.com – Panel Urges Caution on Sanctions for Failure to Preserve Data

October 13, 2010 By Global EDD Group Leave a Comment

A panel of state and federal judges has voiced concern about the differing standards for the pre-litigation preservation of electronic records by state and federal judges sitting within the 2nd Circuit.

A limited number of federal trial courts favor hard-and-fast rules that mandate sanctions for the failure to preserve electronic documents, according to the report issued by the New York State-Federal Judicial Council.[FOOTNOTE 1]

By contrast, the report notes, many state judges, prefer to apply “a simple reasonableness standard” and to weigh the imposition of sanctions for destruction of evidence on “a case-by-case basis.”

After comparing case law in New York and federal courts, the report found that there are potential inconsistencies between state and federal law governing the pre-litigation duty to preserve electronically shared information that could result in inconsistencies in sanctions for the breach of that duty.

via Law.com – Panel Urges Caution on Sanctions for Failure to Preserve Data.

Filed Under: From The News Tagged With: Circuit, com, concern, federal judges, federal judicial, federal trial courts, judicial council, panel urges caution, Preserve, Sanctions