The January 2015 Case Notes discuss the following:
- A Nebraska federal court decision citing the proportionality provisions of Fed. R. Civ. P. 26(b)(2)(C) in rejecting plaintiff’s motion to require defendant to image all its servers and computers.
- A West Virginia court entering a Fed. R. Evid. 502(d) order that permitted manual review of documents for privilege, rejecting plaintiffs’ request to require that any privilege review be performed using solely technology and without manual review.
- A Connecticut federal court ruling denying plaintiffs’ motion to inspect defendants’ cellular phones for evidence of derogatory text messages, holding that the request was overbroad and implicated defendants’ privacy interests.
- An Indiana federal court order denying plaintiff’s motion for spoliation sanctions for destruction of a computer for failure to demonstrate defendant’s bad faith, but allowing introduction of evidence of the computer’s destruction because it was relevant to plaintiff’s claims.
1. In Design Basics, LLC v. Carhart Lumber Co., 2014 US Dist. LEXIS 165704 (D. Neb. Nov. 24, 2014), Magistrate Judge Cheryl R. Zwart denied plaintiff’s motion to require defendant to image all its servers and computers, finding that such a request violated the proportionality provisions of Fed. R. Civ. P. 26(b)(2)(C).
Plaintiff alleged that defendant had misappropriated its blueprints and designs and sought to have defendant image every computer or computer data storage device used by defendant and any of its employees, including secretaries. Id. at *1. The defendant objected that the request was overbroad. Magistrate Judge Zwart ordered the parties to develop search methodology and stated that the parties were not required, absent a stipulation or a showing of good cause, to search for responsive ESI from more than 10 key custodians or from sources that are not reasonably accessible. Id. at *2. As part of its discovery preparations in response to plaintiff’s misappropriation claims, the defendant had searched its server and reviewed and compiled data from the computers of its president and draftsmen (11 computers in all). Id. at *4.
Following the Magistrate Judge’s order, the plaintiff moved to compel defendant to image every computer or data storage location owned or used by the defendant. See id. at *7. Plaintiff’s counsel told the court that he “litigates design misappropriation cases nationwide, and he always (except in a rare case) is granted the right to image a defendant company’s entire computer system.” Id. at *2. The Magistrate Judge noted that plaintiff “cited no cases supporting this argument.” Id. Plaintiff presented expert testimony that the computers of secretaries and assistants “frequently contain evidence relevant to the matter at hand,” and that the expert’s company had not seen an order limiting ESI discovery to a specific number of computers or custodians in any of the over 10,000 cases in which the company had been engaged. Id. at *7-*8.
Magistrate Judge Zwart denied plaintiff’s motion and granted defendant’s corresponding motion for protective order. She stated that “[p]laintiff’s demand for all of the defendant’s computer data is consistent with the position of its expert, but it is not consistent with the balancing required under Rule 26(b)(2)(C).” Id. at *8 (italic in original). She pointed out that her discovery order did not limit the number of discoverable custodians, but only required that plaintiff show good cause to expand ESI discovery beyond that number. Id. Plaintiff failed to make such a showing, as it (1) did not review the emails that defendant had identified as responsive, (2) did not depose anyone and (3) did not answer her questions as to which additional computers needed to be imaged and why. See id. at *7-8. Magistrate Judge Zwart concluded:
“Taking into consideration the factors listed in Fed. R. Civ. P. 26(b)(2)(C), the court is convinced that allowing imaging of every computer or data storage device or location owned or used by the defendant, including all secretaries’ computers, is not reasonable and proportional to the issues raised in this litigation.” Id. at *8 (italic in original).
2. In Good v. American Water Works, Co., Inc., 2014 WL 5486827 (S.D. W. Va. Oct. 29, 2014), District Judge John T. Copenhaver, Jr. entered a Fed. R. Evid. 502(d) order that allowed manual review of documents for privilege, rejecting plaintiffs’ request to require that any privilege review be performed using only technology and without the slower manual review.
In this class action, the parties sought a Rule 502(d) order to govern the handling of privileged documents and any inadvertent production of same. Defendants sought such an order to protect privileged documents inadvertently produced while also allowing defendants to conduct a “manual privilege review for . . . the most sensitive document categories.” Id. at *3 (citing Defs.’ Reply).
Plaintiffs opposed this manual privilege review as likely to lead to considerable delay that could be avoided by use of the clawback provisions under Fed. R. Civ. P. 26(b)(5)(B) and Fed. R. Evid. 502(b) as well as computer assisted review of documents for privilege:
“Plaintiffs are willing to agree to an order that provides that the privilege or protection will not be waived and that no other harm will come to the Defendants if Plaintiffs are permitted to see privileged or work product protected documents. Under those circumstances, however, Plaintiffs can see no practical reason for Defendants to engage in any kind of manual privilege review prior to production of documents other than to delay the production of documents.
In fact, Plaintiffs can see no very good reason for any kind of privilege review at all prior to production, but are willing to agree to computer[-]assisted searches and other machine-based privilege reviews as a compromise because those are unlikely to result in any significant delays.” Id. at *2 (quoting Pls’ Resp. at 1).
District Judge John T. Copenhaver, Jr. rejected plaintiffs’ approach, stating that defendants “appear to desire a more predictable clawback approach without facing the uncertainty inherent in the Rule 502(b) factoring analysis.” Id. Judge Copenhaver found that defendants’ “cautious approach” was a “reasonable one” not prohibited by Rule 502, and entered defendants’ proposed order. Id. at *3. Judge Copenhaver explained that he expected “that the defendants will marshal the resources necessary” so that “disclosure of the entirety of even the most sensitive categories is accomplished quickly.” Id. He further stated that if this process appeared likely to cause delay that would threaten compliance with the court’s scheduling orders, plaintiffs could file a motion to have their Rule 502(b) approach adopted, which the court would then hear “on a priority basis.” Id.
3. In Bakhit v. Safety Marking, Inc., 2014 WL 2916490 (D. Conn. June 26, 2014), Magistrate Judge Holly B. Fitzsimmons denied plaintiffs’ motion to inspect defendants’ cellular phones for evidence of derogatory text messages, holding that the request was overbroad and implicated plaintiffs’ privacy interests.
The plaintiffs filed suit against the plaintiffs’ former employer and several former coworkers, alleging race discrimination, hostile work environment and negligent and intentional infliction of emotional distress. Id. at *1. The plaintiffs alleged that it was “common practice” among employees to share racist text messages and jokes via cellular phones. Id. During discovery, the plaintiffs sought to recover data from 2008 to the present from the cellular phones of 10 employees as well as call and text records from the employees’ cellular service providers. Id. at *1-*2. The employees agreed to authorize retrieval of phone and text records from their cellular service providers, but objected to the inspection of their cellular phones. Id. at *2.
Under Rule 34(a), “[a] party may serve on any other party a request within the scope of Rule 26(b) . . . to produce and permit the requesting party or its representative to inspect, copy, test or sample any . . . electronically stored information.” Id. (quoting Fed. R. Civ. P. 34(a)(1)(A)). Magistrate Judge Fitzsimmons cited case law stating that Rule 34(a) does not provide a “routine right of direct access to a party’s electronic information system” and that requests for electronically stored information must be balanced against the “responding party’s confidentiality or privacy interests.” Bakhit, 2014 WL 2916490, at *2 (quoting Genworth Fin. Wealth Mgmt., Inc. v. McMullan, 267 F.R.D. 443, 446 (D.Conn. 2010) (internal quotations omitted)). The Magistrate Judge also noted the recent Supreme Court decision in Riley v. California and its finding that modern cellular phones—which often have “immense storage capacity” and contain information on their owners’ “private interests and concerns”—are one area where discovery requests can implicate privacy issues. Bakhit, 2014 WL 2916490, at *3 (citing Riley v. California, Nos. 13-132 and 13-212, 134 S.Ct. 2473 (June 25, 2014)).
Although the plaintiffs sought information that was relevant to their claims, the Magistrate Judge denied their motion for inspection on the ground that “the request as framed [was] overly broad and too intrusive for this stage of discovery.” Bakhit, 2014 WL 2916490, at *2 (noting the contra decision in Freres v. Xyngular Corp., 2014 WL 1320273, at *4-5 (D. Utah Mar. 31, 2014)). First, she found that the plaintiffs failed to demonstrate that they had been “unable to obtain similar information through other discovery methods,” noting that the plaintiffs had “yet to see what information the authorizations directed to the individual defendants’ cellular service providers [would] yield.” Bakhit, 2014 WL 2916490, at *2 (citation omitted). Second, the Magistrate Judge noted that the privacy interests implicated by the requested inspection—i.e., the potential disclosure of private information contained on the employees’ cellular phones—was “precisely” the information at issue in Riley. Id. at *3. Accordingly, Magistrate Judge Fitzsimmons denied plaintiffs’ motion without prejudice and “encouraged [plaintiffs] to use other discovery devices to narrow the scope of their requested search and inspection of the cell[ular] phones.” Id.
4. In Malibu Media, LLC v. Harrison, 2014 WL 7366624 (S.D. Ind. Dec. 24, 2014), Magistrate Judge Mari J. Dinsmore denied plaintiff’s motion for spoliation sanctions relating to the destruction of a computer because plaintiff failed to show defendant’s bad faith. However, the court did allow introduction of evidence of the computer’s destruction because it was relevant to plaintiff’s claims.
On August 14, 2012, Malibu Media, LLC brought an action against unidentified individuals alleging that they infringed on Malibu’s copyright by using a peer-to-peer file sharing network to trade copies of a movie. On August 27, 2012, Malibu issued a subpoena to the Internet service provider (ISP) Comcast Corporation, which disclosed the identifying information of one such individual. At the time that Comcast notified Malibu, Comcast also notified the allegedly offending individual, Michael Harrison, that his information was being disclosed. Malibu subsequently amended its complaint to name Harrison.
Malibu issued a discovery request for the contents of all of Harrison’s computers during the relevant time periods. Harrison later disclosed that one of his computers began suffering problems in January 2013. To address the problem, he replaced the hard drive and disposed of the old one. Malibu requested default judgment against Harrison based on spoliation.
As noted by the Magistrate Judge, to establish spoliation, a party must establish: (1) that there was a duty to preserve evidence because the party “knew, or should have known, that litigation was imminent” and (2) that, while under this duty, the party acted in “bad faith,” that is, destroying evidence “for the purpose of hiding adverse information.” Id. at *3 (citations omitted).
Though the Magistrate Judge found that Harrison was subject to a duty to preserve evidence, the Magistrate Judge denied the motion for spoliation because she found that Harrison did not destroy the hard drive in bad faith. First, Harrison learned of the litigation in the September 27, 2012 letter from Comcast stating that Malibu had filed a lawsuit and that Harrison had been identified as “allegedly infringing Malibu Media, LLC’s copyrights on the Internet by uploading or downloading a movie without permission.” Id. at *4 (citations omitted). The Magistrate Judge ruled that this letter was sufficient to establish a duty to preserve evidence and further found that the preservation obligation existed as to the computer drive destroyed in January 2013.
Second, the Magistrate Judge concluded that Harrison did not destroy the hard drive in bad faith. As an initial matter, Harrison stated in his deposition that he did not destroy the hard drive to hide information. Rather, he explained that he conducts gaming on his computers and that he regularly had to replace his computer hard drives — four to six times since 2007 — because gaming is particularly hard on computers. Id. at *6. Harrison also noted that he would not have used this computer for downloading movies because he used only his gaming computer for gaming purposes. Id. at *7. The Magistrate Judge found this testimony credible and also noted that it was “unlikely that Defendant would have waited nearly five months to destroy such information.” Id. The Magistrate Judge concluded that Harrison did not believe that the computer contained adverse information and, thus, did not destroy the evidence in bad faith. Id. at *8.
Malibu argued that willfulness or fault is sufficient to find spoliation, citing Marracco v. General Motors Corp., 966 F.2d 220 (7th Cir. 1992). The Magistrate Judge rejected this argument, however, finding that Marracco was limited to violations of an order to provide or permit discovery, a protective order or other court order: “[t]his standard is thus inappropriate in this case, as Plaintiff has not invoked Rule 37 and has not identified any court order that Defendant allegedly disobeyed.” Malibu Marine, 2014 WL 7366624, at *9. The Magistrate Judge also rejected Plaintiff’s argument that the court could rely on its inherent power to sanction parties for misconduct, noting that reliance on a court’s inherent power also requires a showing of bad faith. Id. The Magistrate Judge concluded by stating that plaintiff had even failed to make a showing of willfulness or fault. Id.
Having concluded that sanctions were not appropriate in this case, the Magistrate Judge ruled that Malibu could introduce evidence of the destroyed computer because it was relevant to its claims.
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