April's Notable Cases and Events in E-Discovery

1. In Guarisco v. Boh Brothers Constr. Co. LLC, 2019 WL 4881272 (E.D. La. Oct. 3, 2019), District Judge Carl J. Barbier granted a defendant’s motion for spoliation sanctions but relied on the court’s inherent authority to grant the sanctions after concluding that Fed. R. Civ. P. 37(e) did not apply because the spoliated materials had not been irretrievably lost.

The spoliation motion was filed in a case arising out of an automobile accident at an intersection at the site of a federally funded flood control and drainage construction project overseen by state and federal agencies.  Id. at *1. According to the defendant, the general contractor on the project, the plaintiff “willfully spoliated evidence by altering a photograph to delete evidence of a two-way street sign and deleting up to 22 videos and photographs entirely.” Id. at *7. As Judge Barbier explained, “Plaintiff’s claim [was] largely premised on [the] alleged failure to properly place a two-way sign at the intersection.” Id. at *7 n.3. 

Defendant supported its spoliation motion with an affidavit of an expert computer scientist whose affidavit “emphatically state[d] that photos of the accident in the [p]laintiff’s possession were deliberately deleted or altered.” Id. at *7. As relief, defendant asked the court for attorneys’ fees and costs. In response, “[p]laintiff neither denie[d] [the] allegations nor provide[d] evidence of a plausible, alternative reason the photographs were altered and deleted.”

Judge Barbier began his analysis by stating that “[a] district court has broad discretion to use its inherent powers to administer sanctions for spoliation.” But, he clarified, “[t]he Court’s inherent authority is limited to ‘instances of bad faith or willful abuse of the judicial process.’ ” Id. (citation omitted). In this case, the request for sanctions was “complicated by the digital nature of the evidence at issue.” Id. at *8. As Judge Barbier explained, “[I]t [was] undisputed that the photographs [were] not lost” because defendant managed to obtain the unaltered picture from a Facebook post the plaintiff made after the accident. While Fed. R. Civ. P. 37(e) addresses the spoliation of digital evidence, “the plain language of Rule 37(e) only applies to cases where the digital evidence is irrecoverably lost.” Accordingly, without proof that any of the digital evidence at issue was lost, Judge Barbier ruled that it would be premature to conclude that Rule 37(e) applied in this instance.

But Judge Barbier did not end his inquiry with Rule 37(e). In his view, “Because the power to sanction spoliation is an inherent power,” it “may be invoked even in the presence of procedural rules sanctioning the same conduct.” Moreover, this “inherent power is … not restricted when the procedural rule does not sanction the precise conduct at issue.” Indeed, “[t]o allow a party to avoid sanctions merely because the attempt to destroy evidence was unsuccessful would be to ignore one of the primary goals of sanctioning spoliative conduct.” Judge Barbier also recognized that “inherent powers should be exercised with restraint” and that courts in the Fifth Circuit “have a duty to impose the least severe sanction that is sufficient to deter future conduct.”

Ultimately, Judge Barbier found that plaintiff “intentionally altered evidence to make it appear more favorable to her case” and concluded that the least severe sanction that would still deter future similar conduct would be to impose the expert’s fees as a sanction on plaintiff.

2. In Taylor v. Kilmer, 2020 WL 606781 (N.D. Ill. Feb. 7, 2020), Magistrate Judge Jeffrey Cummings of the Northern District of Illinois quashed, in part, third-party subpoenas requiring medical providers to generate reports and provide information about recovery rates on the grounds that those subpoena requests were unduly burdensome and that the recovery rate request was irrelevant.

In this personal injury litigation, plaintiffs sued defendants for their role in a motor-vehicle accident. Id. at *1. Seeking compensation for their medical expenses, plaintiffs produced medical bills and records from various providers. In turn, defendants issued numerous third-party subpoenas to medical providers. The subpoenas sought, among other things, information about the providers’ rates to patients in general, treatment differences between litigating and nonlitigating patients, percentages of reimbursements for litigating and nonlitigating patients, and the fee schedule and data used to determine how much to bill plaintiffs. The subpoenas also requested that the providers generate a “report” for the requested data. Another set of subpoenas were aimed at providers who had treated one of the plaintiffs for a later-in-time set of injuries in an unrelated accident.

Plaintiffs moved to quash these subpoenas, “arguing they were overbroad, unduly burdensome, and sought information irrelevant to the claims and defenses in the case.” Id. at *2.

In deciding whether to quash the subpoenas, Judge Cummings noted that under Rule 26, parties may obtain any discovery relevant to any party’s claim or defenses and proportional to the needs of the case. Judge Cummings also observed that under Rule 45(d), a court must quash subpoenas that pose an undue burden. Finally, Judge Cummings explained that in balancing the factors to determine whether a discovery request imposes an undue burden, “[c]oncern for the unwanted burden thrust upon non-parties is a factor entitled to special weight in evaluating the balance of competing needs.” Id. (quoting Uppal v. Rosalind Franklin Univ. of Med. & Sci., 124 F. Supp. 3d 811, 813 (N.D. Ill. 2015) (emphasis in original)).

After balancing the burden of the discovery with the needs of the case, Judge Cummings held that several of the subpoena requests were unduly burdensome. Id. at *3. As an initial point, Judge Cummings explained that “Rule 45 does not contemplate that a non-party will be forced to create documents that do not exist.” Id. (quoting Insituform Techs., Inc. v. Cat Contracting, Inc., 168 F.R.D. 630, 633 (N.D. Ill. 1996)). Therefore, the request that the providers generate “reports” was unduly burdensome. Judge Cummings also found that the broad general billing information related to other patients imposed a significant burden due to the scope and number of documents that would be involved.

In addition to being unduly burdensome, Judge Cummings held that the broad general billing information was largely irrelevant. Id. at *4. Billing differences can be relevant in determining the reasonable expense of the medical care — part of the evidence necessary in proving costs. Judge Cummings distinguished, however, information about different prices charged to customers from information about providers’ rates of recovery. Judge Cummings clarified that while billing differences were relevant in showing the reasonableness of the providers’ charges, the providers’ realization of revenue was irrelevant. To that end, Judge Cummings quashed discovery aimed at realization rates but permitted discovery into whether the fees charged were different among patients.

Judge Cummings concluded by turning briefly to the subpoenas directed at medical providers who provided treatment to one plaintiff for unrelated later-in-time injuries. Judge Cummings noted that both parties made concessions at the hearing, and, pursuant to those concessions, defendants could seek only medical records related to the plaintiff at those providers. Id. at *5.

3. In Stone Brewing Co., LLC v. MillerCoors LLC, 2019 WL 4450754 (S.D. Cal. Sept. 17, 2019), Magistrate Judge Linda Lopez granted in part plaintiff’s motion to compel and for sanctions in connection with its discovery requests pertaining to defendant’s historical marketing materials for Keystone beer but denied plaintiff’s request to inspect certain historical records on site at defendant’s premises.

This discovery dispute arose in a trademark suit in which plaintiff Stone Brewing Company, LLC, sued defendant MillerCoors LLC, producer of Keystone beers, for trademark infringement. According to plaintiff, defendant withheld “critical” evidence in violation of its discovery agreements by refusing to produce images of the full range of historical marketing materials and producing what plaintiff claimed were a “cherrypicked selection of Keystone materials.” Id. at *3. According to plaintiff, “the missing material [including an on-site inspection of the MillerCoors’s archive] is critically relevant to MillerCoors’s claim to be the senior user of the Stone® mark.” Plaintiff therefore requested that the magistrate judge order “(1) a full production of historical Keystone materials encompassing the full universe of marketing, packaging, and advertising, not just those that refer to Stone or Stones; (2) an on-site inspection of the historical items in their locations in the Coors archive; and (3) an additional deposition of Ms. Harris [defendant’s 30(b)(6) witness and archivist] after all historical materials have been produced.” Id. (internal quotation marks omitted).

In response, defendant argued that the magistrate judge should deny plaintiff’s motion for four reasons: “(1) it [was] untimely; (2) Defendant ha[d] complied with Plaintiff’s discovery requests as they never requested all historical marketing materials for Keystone dating back to 1989; (3) Plaintiff [was] not entitled to an inspection of the Coors Archive (nor a third deposition of Ms. Harris) because Plaintiff never served a request to inspect either the archives or any of the items in the archives; and (4) there [was] no basis to impose sanctions on MillerCoors because there [was] no violation of a court order regarding the discovery in question.” Id. at *4 (internal quotation marks omitted). 

First, as to defendant’s timeliness objection, Magistrate Judge Lopez agreed with plaintiff that “the withholding of responsive documents was only revealed at the expert deposition of Ms. Harris,” and plaintiff timely sought relief less than 30 days after receiving the final transcript of that deposition. Id. at *5. 

Second, Magistrate Judge Lopez also agreed with plaintiff and overruled defendant’s second objection that the terms used were vague and ambiguous or overbroad and burdensome. Moreover, defendant did not state in its objections to plaintiff’s discovery requests that it was withholding any responsive materials. Indeed, defendant represented that “it would produce additional, responsive, non-privileged documents, if any, capable of being identified and located following a reasonable search of relevant custodians and sources likely to contain such documents.” In light of these facts, Magistrate Judge Lopez concluded that defendant had not met its discovery obligations and granted plaintiff’s request for a “full production of historical Keystone materials.”

Third, Magistrate Judge Lopez denied plaintiff’s request for an on-site inspection of the historical items in their locations, noting that plaintiff’s argument seeking access to the archive itself lacked any supporting authority. Fourth, Magistrate Judge Lopez granted plaintiff’s request for an additional deposition of Harris, concluding that it was “appropriate in light of Defendant’s failure to provide timely and complete discovery responses.” Id. at *7. But Magistrate Judge Lopez declined plaintiff’s request for sanctions. In her view, “It is not clear from Plaintiff’s briefing whether Plaintiff’s request for evidentiary preclusion sanctions is an alternative to the discovery sought.” Further, this was the first time this discovery issue had been raised, and, in Magistrate Judge Lopez’s view, defendant’s conduct was not so egregious as to warrant the imposition of preclusionary evidence or monetary sanctions. 

4. In United States v. Beverly, 2019 WL 5997389 (5th Cir. Nov. 14, 2019), the Fifth Circuit reversed an order suppressing certain historical cell-site location information (CSLI) and related evidence based on the lack of a valid warrant supported by probable cause, ruling that the district court should have applied “various strands of the good-faith exception to the warrant requirement.”

In May 2015, defendant was one of five individuals named by a confederate for his participation in a string of armed bank robberies. Id. at *1. Shortly thereafter, the government applied for an order pursuant to the Stored Communications Act (SCA), 18 U.S.C. § 2703(d), directing the confederate’s telecommunications provider, T-Mobile, to provide “subscriber information, toll records, and historical CSLI for [the confederate’s] iPhone.” With the order in hand, the government did not pursue a warrant for the information. The government subsequently associated four other phone numbers with the named individuals, including defendant, and submitted a second § 2703(d) application requesting the same information for these additional phone numbers.

Over a year later, while incarcerated in a state facility for unrelated probation violations, defendant was charged by federal indictment with multiple counts of conspiracy, armed bank robbery, attempted armed bank robbery and brandishing a firearm during a crime of violence. Id. at *2. Less than two month before the start of defendant’s federal trial, the Supreme Court issued its decision in Carpenter v. United States, 138 S. Ct. 2206 (2018), wherein the Supreme Court held that obtaining CSLI constituted a “search” under the Fourth Amendment and therefore required a valid warrant supported by probable cause.  On the same day the Supreme Court issued its Carpenter decision, federal prosecutors applied for — and received — a search warrant for the CSLI they had previously obtained and additional historical CSLI data extending beyond the period the government previously obtained pursuant to the SCA order.

Defendant moved to suppress the information, arguing that the government acted in bad faith when it belatedly obtained its warrant in the wake of Carpenter. The district court granted defendant’s motion, suppressing the CSLI and ruling that the government’s SCA order and subsequent warrant were invalid.

On appeal, the government contended that the district court erred in suppressing defendant’s CSLI because it failed to apply the good-faith exception to the warrant requirement. Id. at *4. Specifically, the government focused its attention on its pre-Carpenter order and, relying on a strand of the good-faith exception first articulated in Illinois v. Krull, 480 U.S. 340 (1987), argued that the good-faith exception applies to instances where evidence was obtained from warrantless searches later held, like this one, to be unconstitutional. Id. at *3-*4. Defendant, like the district court, focused on the post-Carpenter warrant, arguing that because the government obtained that warrant in bad faith, the good-faith exception did not apply. Id. at *4.

As an initial matter, the Fifth Circuit clarified that while the parties had treated the suppressed CSLI as a single unit, the CSLI in this case should actually be treated as two separate units, the portion of the CSLI first obtained with the pre-Carpenter order (the 2015 CSLI) and the portion of the CSLI later obtained with the post-Carpenter warrant (the 2014 CSLI). Id. at *5.

As to the 2015 CSLI, the Fifth Circuit agreed with the government and held that the good-faith exception applied because even though the government did not initially obtain a warrant, it procured the 2015 CSLI through an SCA order long before the Supreme Court issued its decision in Carpenter. According to the Fifth Circuit, “By all accounts, the FBI investigators acted in good faith in 2015 when they reasonably relied on the authorization provided by [the SCA].” Id. (emphasis in original). The Fifth Circuit also noted that “every one of our sister courts to have considered this question since Carpenter has agreed that the good-faith exception — specifically, the Krull exception — applies to CSLI obtained under [the SCA] prior to Carpenter.” Id. at *6. Of “particular salience” was the Sixth Circuit’s ruling in the remand of the Carpenter case from the Supreme Court, in which the Sixth Circuit found that the CSLI evidence was “still admissible against Carpenter himself because of the good-faith exception.” Id. (citing Carpenter v. United States, 926 F.3d 313, 317-18 (6th Cir. 2019)) (emphasis in original).

The Fifth Circuit then turned to the 2014 CSLI and ruled that the good-faith exception applied to this data as well because, in the Fifth Circuit’s view, “the government acted in good faith when applying for the search warrant and, even if the government did not act in good faith, the warrant was supported by probable cause.” Id. at *5. The Fifth Circuit, recognizing that Krull did not apply to the 2014 CSLI because it was not obtained until after Carpenter, began its analysis by applying a two-step test to determine whether to suppress the evidence: “first, we ask whether the good faith exception to the rule applies, and second, we ask whether the warrant was supported by probable cause.” Id. at *6.

On step one, the Fifth Circuit concluded that the good-faith exception applied “[b]ecause the government did not already possess the 2014 CSLI when it applied for the search warrant in 2018.” Id. at *7. Defendant contended that the government’s warrant application was misleading because the government “failed to disclose to the magistrate that it already had the information for which it sought a warrant.” But the 2015 CSLI should be treated separately and, as the Fifth Circuit already concluded, was not subject to suppression. Further, the record reflected that the 2014 CSLI was not in the government’s possession at the time of the warrant application. In any case, “even if the government’s failure to reveal its possession of the 2015 CSLI amounted to bad faith with respect to the 2014 CSLI, the government would still prevail under step two: probable cause.” The Fifth Circuit concluded that the government’s search warrant application, which described a variety of additional evidence linking defendant to the bank robberies, satisfied the probable cause standard because “[a] prudent person looking [at the facts set forth in the application] would be justified in believing that [defendant] participated in the bank robberies.” Id. at *8.

The Fifth Circuit also rejected defendant’s argument that his CSLI was the fruit of the poisonous tree stemming from the search of his confederate’s data because the search of his confederate’s CSLI was similarly subject to the good-faith exception, and, in any case, defendant lacked standing to challenge the constitutionality of the search of his confederate’s data.

Finally, the Fifth Circuit held that “[t]o the extent that the district court intended to suppress the [toll records and subscriber information obtained under the SCA order], it erred.” Defendant argued that Carpenter should be read to apply to this information as well as to CSLI because, in his view, “the government ‘doubtless’ w[ould] attempt to use his toll records and subscriber information to track his location over time.” The Fifth Circuit disagreed, stating that defendant “fails to articulate any credible grounds for accepting” his contention that the government would, or even could, use these records to track his physical location over time. Moreover, the Supreme Court cautioned that its decision in Carpenter was “narrow” and that the decision did not address, among other things, “other business records that might incidentally reveal location.” Id. (internal quotation marks omitted).