Forensic Discoveries Newsletter - When ESI isn't "there"

Bray & Gillespie Mgmt. LLC v. Lexington Ins. Co., 2009 WL 2407754 (M.D. Fla. Aug. 3, 2009)

In this ongoing insurance litigation, the defendants sought dismissal sanctions or preclusion of evidence pertaining to a key business interruption loss claim. The defendants argued the plaintiffs' violation of three court orders to compel production, misrepresentations that discovery was complete and production of 188 pages of key documents after the close of discovery warranted sanctions. In opposition, the plaintiffs argued they had no reason to know the production was incomplete. Finding that none of the court's previous efforts were effective to defer the plaintiffs from "continuing their pattern of stubborn defiance," the magistrate judge determined severe sanctions were warranted. In cataloging the plaintiffs' discovery failures, the magistrate judge noted that "no reasonable person could conclude" the plaintiffs' failure to timely produce documents was justified and that the plaintiffs' conduct was intended to deceive and prevent discovery. The magistrate judge also discussed the attorneys' role in the discovery misconduct, noting lawyers owe a duty of candor to the court and a duty to deal honestly and fairly with opposing counsel. Accordingly, the magistrate judge granted the motion for preclusion sanctions and determined the plaintiffs and counsel were jointly and severally responsible for the defendants' expenses and costs.

Court Orders Production of Litigation Hold Letters upon Preliminary Finding of Spoliation

Major Tours, Inc. v. Colorel, 2009 WL 2413631 (D.N.J. Aug. 4, 2009)

In this discrimination litigation, the plaintiffs sought production of the defendants' two litigation hold letters. The plaintiffs argued the letters were relevant to their examination of the defendants' document production and whether spoliation occurred. In opposition, the defendants claimed the plaintiffs failed to demonstrate evidence of spoliation and thus the letters were protected from discovery. Noting that litigation hold letters are in general privileged and not discoverable unless spoliation occurs, the court found a preliminary showing of spoliation existed in this case. The court inferred that relevant evidence was lost given the failure to timely ask a number of pertinent custodians to preserve evidence in addition to the significant time lapse that occurred between the duty to preserve and the issuance of the first litigation hold letter. Accordingly, the court granted the plaintiffs' production request, limiting it to those portions of the letters pertaining to preservation.

Court Issues Sanctions for Preservation and Litigation Hold Failures

Green v. McClendon, 2009 WL 2496275 (S.D.N.Y. Aug. 13, 2009)

In this breach of contract dispute, the plaintiff sought sanctions alleging the defendants failed to preserve and produce electronically stored information (ESI). Finding the duty to preserve arose no later than the lawsuit's filing, the court determined the defendants' counsel failed to meet discovery obligations by neglecting to issue a litigation hold and properly search for responsive documents. Despite these failures, the court declined to issue an adverse inference instruction since there was no proof that the defendants' actions created an unfair evidentiary imbalance, noting the absence of evidence that any relevant information was destroyed. However, the court held other sanctions were appropriate, including further discovery of ESI and an award of attorneys' fees and costs to be allocated among the defendants and counsel once the "respective blame-worthiness" was determined.

Court Foresees Day When a Lack of Internal E-Discovery Software Will not be Well Received

Capitol Records, Inc. v. MP3tunes, LLC, 2009 WL 2568431
(S.D.N.Y. Aug. 13, 2009)

In this copyright infringement litigation, the court addressed several discovery disputes it claimed could have been avoided if the parties had "focused their attention on discussing their differences, rather than drafting dueling epistles." Addressing the defendant's issues, the court did not agree with the defendant that producing and searching files would be unduly burdensome. Thus the court ordered the defendant to conduct thirty searches proposed by the plaintiffs, which included additional custodians. The court then addressed the plaintiffs' arguments that the discovery sought by the defendant was unduly burdensome in part because they were unable to conduct centralized e-mail searches without relying on an outside service provider. Noting that the day will come when the burden argument based on a large organization's lack of internal e-discovery software will not be well received, the court found that e-discovery case law had not yet developed to this point. Therefore, the court upheld the plaintiffs' argument and concluded that the e-mail files the defendant sought to search were not reasonably accessible. Finally, the court considered the specific document requests from the defendant to the plaintiffs that were at issue, and restricted the search terms and production scope as appropriate for each request.

Court Imposes Sanctions for Destruction of Information Contained on BlackBerry Smartphones

Se. Mech. Servs., Inc., v. Brody, 2009 WL 2883057 (M.D. Fla. Aug. 31, 2009)

In this ongoing computer fraud and abuse litigation, the plaintiff requested sanctions alleging the laptops and BlackBerry smartphones belonging to the defendants were wiped of data. The defendants argued that all evidence was preserved on the servers and that e-mails were produced in hard copy from the servers. Relying on explanations provided by computer forensics experts that the "wiped" state of the BlackBerry smartphones was attributed to intentional and deliberate actions, the court disagreed with the defendants' arguments and held that sanctions were appropriate. Given the nature of the destroyed evidence, including personal e-mails, telephone records, text messages and calendar entries, the court determined the evidence was likely unfavorable to the defendants and therefore issued an adverse inference instruction.