Forensic Discoveries Newsletter - Two Weeks Until the New Rules

EDiscovery Case Law

Court Denies Demand for Paper Production of Electronic Documents

In re the Account of Tamer, 2009 WL 1058594 (N.Y.Sur. Apr. 20, 2009).

In this contested accounting of a revocable trust, the objectant sought authorization to produce approximately 6,000 documents electronically on CD-ROMs and DVDs, while the trustees filed a cross-motion seeking paper production. Noting the relevant state statute neither authorizes nor prohibits electronic production, the court stated, "It is implicit that where a party seeks electronic discovery, the responding party will produce the information sought by some form of electronic means." Accordingly, the court held the objectant may produce documents electronically, provided the production is accompanied by an index identifying each document's file location and responsiveness to a discovery demand. The court concluded that the index would prevent the imposition of an undue burden on the trustees who would otherwise need to read through 6,000 documents.

Court Denies Sanction Request Citing Party's Routine Deletion Policy

Patterson v. Goodyear Tire & Rubber Co., 2009 WL 1107740 (D.Kan. Apr.23, 2009).

In this employment litigation, the plaintiff soughtproduction of various electronic employee records and policies, and anadverse inference instruction alleging spoliation of attendance records. The defendant argued electronic copies no longer existed due to the routine document deletion every 12 months, but that all records were preserved and produced in hard copy. Denying the motion to compel as untimely, the court noted "both parties neglected the issue of ESI from the outset of this litigation" in violation of their obligations under Rule 26 of Kansas' Guidelines for Discovery of Electronically Stored
Information. Because many of the documents sought were contained on backup tapes, if available at all, the court was hesitant to intervene at the late time, but ordered the defendant to search two backup tapes pursuant to its offer to do so. The court denied the adverse inference instruction request, determining there was no evidence the attendance records were intentionally destroyed given the defendant's routine deletion system.

Court Permits Testimony of Forensic Expert Regarding Alleged Evidence Destruction

Mintel Int'l Group, Ltd. v. Neergheen, 2009 WL 1033357 (N.D.Ill.Apr.17, 2009).

In this ongoing misappropriation of trade secrets litigation, both parties offered testimony from qualified computer forensics and electronic discovery experts. The defendant sought exclusion of the plaintiff's expert from testifying, alleging the expert failed to meet the appropriate standards, and requested exclusion of evidence regarding spoliation allegations claiming the evidence was irrelevant and prejudicial. The plaintiff objected to the magistrate judge's order denying production of a mirror image from a third party. Granting the defendant's motion to exclude in part, the court ordered preclusion of the expert's legal conclusions regarding whether the defendant's conduct constituted spoliation, but otherwise allowed testimony. The court noted the expert must be able to technically explain the conclusion reached regarding whether the defendant used a "defrag" program and not simply speculate "to please the side that hired him." Turning to the spoliation issue, the court denied the defendant's motion, concluding the experts' views on whether evidence was deleted would be "extremely helpful given the complexity of the electronic evidence issues." Finally, the court upheld the magistrate judge's recommendation to deny production of the third party's mirror image given the magistrate judge's previous analysis of the conflicting expert testimony and evidence presented by the plaintiff.

Court Grants Motion for Hearing on Spoliation Citing Possible
Application of Zubulake Exception

Forest Labs., Inc. v. Caraco Pharm. Labs., Ltd., 2009 WL 998402 (E.D. Mich. Apr. 14, 2009).

In this patent litigation, the defendants moved for a hearing on sanctions for spoliation alleging the plaintiffs intentionally or recklessly destroyed backup tapes. Opposing the motion, the plaintiffs denied misconduct claiming they preserved electronic records pursuant to their standard operating procedures but admitted they did not halt all backup tape recycling. Thus, the court determined that potentially relevant evidence was destroyed after the duty to preserve arose. However, the court also determined the backup tapes were inaccessible and there is no duty to preserve inaccessible backup tapes beyond a company's normal retention period unless the Zubulake exception applies. The Zubulake exception requires the preservation of backuptapes containing documents of "key players" if the information is not otherwise available. Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212(S.D.N.Y. 2003). The court granted the defendants' motion and ordered a hearing to determine whether the Zubulake exception applies and, if so, whether the plaintiffs acted with the requisite culpability and whether the spoliated evidence was relevant.

Court of Appeals Affirms Trial Court's Award of Monetary Sanctions and Admission of Expert Forensic Testimony

Oz Optics Ltd. v. Hakimoglu, 2009 WL 1017042 (Cal. App. 1 Dist. Apr. 15, 2009).

In this employment dispute, both parties appealed the denial of their respective motions for judgment notwithstanding the verdict\ (JNOV). The defendant argued that the court improperly allowed expert forensic testimony alleging it was "devoid of substance" and improperly awarded $90,000 in monetary sanctions based on the defendant's hard drive file scrubbing. The plaintiff argued that the court abused its discretion by limiting sanctions to $90,000. The court of appeals affirmed the trial court on all grounds. First, the court rejected the defendant's argument that the forensic testimony was prejudicial, citing the defendant's inability to demonstrate why the testimony was inappropriate. Second, the court affirmed the sanctions as reasonable compensation for attorney's fees, costs and expenses incurred as a result of the defendant's discovery misconduct. In affirming, the court rejected the defendant's argument that the spoliation was unintentional, determining that intent is not required for monetary sanctions under the California Code of Civil Procedure. The court also rejected the plaintiff's argument that the monetary sanctions did not provide full compensation for reasonable expenses, finding the plaintiffs failed to establish the amount awarded was "arbitrary, capricious or whimsical."

Court Orders Retrieval of Deleted Responsive Files Following Parties' Discovery Shortcomings

Bank of Mongolia v. M & P Global Fin. Servs., Inc., 2009 WL 117312 (S.D.Fla. Apr. 24, 2009).

In this RICO action, the plaintiff sought a production response from the defendants after a previous motion to compel proved fruitless. The plaintiff also requested sanctions in the form of direct access to the defendants' computer hardware andelectronic information. Finding the defendants failed to present a sufficient reason for the discovery inadequacies, the court determined an independent computer expert should be appointed to retrieve deleted responsive files from the defendants' computers. The court ordered the plaintiff to submit search terms and bear the expert's costs unless future evidence of discovery misconduct necessitated cost allocation to the defendants, but awarded attorneys' fees to the plaintiff. The court also afforded the defendants the right to review the search terms and determine privilege and responsiveness.