This Sidley Update addresses the following recent developments and court decisions involving eDiscovery issues:
- a decision from the U.S. District Court for the Southern District of New York granting spoliation sanctions where the Plaintiff replaced his phone multiple times after the incident that gave rise to the lawsuit but did not retain his text messages
- an order from the U.S. District Court for the Northern District of Illinois ordering the Defendants to organize their productions of electronically stored information (ESI) to correspondence to the Plaintiff’s document requests and denying Defendants’ motion seeking to require the Plaintiff to disclose its ESI search protocol
- a ruling from the U.S. District Court for the Middle District of Pennsylvania resolving various disputes regarding the scope of an ESI protocol, including with respect to sampling procedures and the production of metadata
- an opinion from the U.S. District Court for the Southern District of New York declining to grant a forensic evaluation of the cell phone of one of the Defendant’s employees
Plaintiff Charles Oakley, a former player for the New York Knicks, brought this action against Defendants for defamation, libel, slander, assault, and battery in connection with an alleged altercation that he had with security at Madison Square Garden (MSG) when he was removed from MSG during a Knicks game on February 8, 2017. Id. at *1.
On July 10, 2024, after the start of discovery, Oakley’s counsel discovered that all text messages sent to or from Oakley’s phone prior to February 2022 had been destroyed. Id. at *2. Oakley claimed that he “routinely traded in his mobile phone for a newer model, upgraded his iPhone at a Verizon store in February 2022, and then lost all his text messages in the process of transferring devices.” At a subsequent deposition, Oakley testified that “he has always used an Android phone, that his cell service provider was AT&T, and that he only upgraded his phone when it broke.” He further testified that he upgraded his phone twice in the past eight years, since 2017 — first in 2020 and then again in 2024. Oakley also admitted “that he took no steps to preserve the data on his phone.”
At a December 19, 2024, hearing, Oakley testified that he texted about his removal from MSG. Oakley also contradicted his deposition testimony by explaining that he traded in his phone three times during the past eight years, including once in 2021. He admitted that he did not instruct AT&T to preserve the data on his old phone when transferring devices, took no steps to image or backup his phone, and was aware of his duty to preserve documents, including text messages.
Defendants served a subpoena on AT&T and received 10,200 pages of records containing the metadata — but not the content — of Oakley’s text messages. The parties disputed the number of text messages that Oakley sent and received between February 8 and March 1, 2017, with Defendants claiming that “Oakley sent 1,113 text messages and received 6,658 text messages during the three weeks following his removal,” although this count may have included potentially duplicative messages with an identical time and date stamp. Id. at *3. (See Doc. No. 342 at 7.) The AT&T records also revealed that Oakley had upgraded to a new phone model seven times in the past eight years.
Based on these facts, Defendants filed a motion for spoliation sanctions against Oakley and his counsel.
Judge Sullivan first explained that “[s]poliation is the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” He further explained that when determining whether spoliation sanctions are warranted under Federal Rule of Civil Procedure 37(e), a court first must “decide … if a party failed to take reasonable steps to preserve ESI,” then whether “there has been prejudice to another party from loss of the information, in which case the [c]ourt may order measures no greater than necessary to cure the prejudice,” and finally “whether the destroying party acted with the intent to deprive another party of the information’s use in the litigation, in which event a court may consider whether to impose the most severe” sanctions of dismissal or an adverse-inference instruction.
Turning to the merits of Defendants’ spoliation motion, Judge Sullivan first concluded that Oakley had a duty from at least September 12, 2017, onward to preserve any text messages pertaining to his removal from MSG. Id. at *4. In reaching this conclusion, Judge Sullivan noted that “[t]he obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” He found that because Oakley filed the instant suit on September 12, 2017, his duty to preserve arose no later than that date.
Judge Sullivan next concluded that both Oakley and his counsel failed to take reasonable steps under Rule 37(e). Judge Sullivan explained that “[o]nce the obligation to preserve relevant ESI attaches, the party in possession of that ESI must take reasonable steps to preserve it” and “counsel is obligated to oversee compliance with a preservation notice.” Oakley claimed that he took reasonable steps to preserve his text messages “because he did not purposefully delete those messages and attempted to transfer them when upgrading cell phones.” He also argued that his counsel complied with their obligations under Rule 37(e) by including a paragraph in their retainer agreements regarding preservation of documents.
The parties each submitted reports from experts, but Judge Sullivan found that Oakley’s expert’s lack of relevant experience “stands in stark contrast to [Defendants’ expert’s] background as a prolific commentator on issues relating to ESI, including as an author of numerous law review and other articles on Rule 37(e) and its predecessors.” Id. at *5. Defendants’ expert noted that “what constitutes reasonable steps under Rule 37(e) is subject to interpretation in the context of specific litigation and is highly dependent on the facts and circumstances of a particular matter.”
The expert opined that “neither Oakley nor his counsel took reasonable steps to preserve his mobile phone.” Judge Sullivan agreed.
Judge Sullivan found that Oakley and his counsel should have taken affirmative steps to preserve his text messages, which could have been accomplished by imaging Oakley’s phone at the time the complaint was filed or by taking screenshots of the text messages. Oakley also could have “ensured that text messages were backed up to a cloud-based server (such as Google Drive); confirmed that any automatic deletion functions on Oakley’s phone were turned off; or even transcribed the contents of the text messages.” Judge Sullivan concluded that the “complete failure to take any affirmative steps to protect the data on Oakley’s phone was unreasonable given the ever-present risk of losing or breaking mobile devices, the relative ease of preserving relevant information on such devices, and the fact that Oakley texted multiple individuals regarding the incident.”
With respect to Oakley’s counsel, Judge Sullivan found that a paragraph in their retainer agreement regarding preservation, without more, “was not sufficient to comply with their preservation obligations.” Id. at *6. Quoting Defendants’ expert, Judge Sullivan explained that “counsel must take actual, actionable steps to make sure evidence is retained and to avoid the possibility of deletion of relevant evidence” and “it is not enough for counsel to issue a hold and assume the client took adequate steps to preserve relevant data.” He held that because counsel “concede[d] that they did not take any steps to monitor or otherwise ensure Oakley’s compliance with his preservation obligations,” they failed to take reasonable steps under Rule 37(e).
Judge Sullivan next found that that Oakley’s text messages could not be restored or replaced through additional discovery. He noted that Defendants issued subpoenas to numerous individuals but had received only an incomplete response from one such recipient. Judge Sullivan also pointed to the fact that Oakley had testified that he texted with “a lot of people” about the incident, and Defendants could not secure copies of those texts from anyone else or from Oakley’s cell provider.
Turning to the appropriate sanction under Rule 37, Judge Sullivan explained that Rule 37(e)(1) permits the imposition of sanctions “when there is prejudice to another party from loss of the information,” requiring an “evaluation of the information’s importance in the litigation.” He stated that Defendants “need not establish that a smoking gun piece of ESI was irretrievably destroyed” but had to “provide evidence that plausibly suggests that the spoliated ESI could support [their] case.”
Judge Sullivan had no difficulty concluding that Defendants demonstrated prejudice. In reaching this conclusion, he relied on the facts that Oakley sent at least 826 text messages in the three weeks following his removal from MSG, including at least 64 text messages in the first 24 hours following his removal, and that the average number of text messages that Oakley sent was more than 250% greater in the three-week period following his removal than in the days leading up to the incident. These facts were complemented by Oakley’s admission through counsel that “he texted about his removal and specifically identified at least thirteen individuals with whom he texted about the incident.”
Based on these facts, Judge Sullivan concluded that MSG did not have access to evidence that might have undermined Oakley’s version of events. In this regard, Judge Sullivan compared public statements made by Oakley to the effect that he “slipped down and fell,” with his allegations in the litigation and he surmised that “[t]here is strong reason to believe that Oakley’s unguarded communications in his text messages would have undermined his assertion that he was assaulted at MSG.”
Having found that MSG was prejudiced by the loss of Oakley’s text messages, Judge Sullivan turned to a consideration of the appropriate sanctions, which he explained must be “no greater than necessary to cure the prejudice.” Id. at *8. Defendants requested that Oakley be precluded “from asserting or introducing any evidence that he was pushed to the ground by MSG security or that he acted in self-defense.” But Judge Sullivan found that “such a sweeping preclusion of evidence” was not permitted under Rule 37(e)(1).
Defendants also requested permission to present evidence related to Oakley’s failure to preserve his text messages, and Judge Sullivan agreed that “this remedy, which is explicitly contemplated in the Advisory Committee’s Note, is appropriate here.” He explained that “[t]he purpose of such a sanction is to ensure that the finder of fact will have the full context for the evidentiary imbalance that will become apparent at trial.” In connection with this remedy, Judge Sullivan granted Defendants’ request for attorneys’ fees and costs expended in prosecuting this spoliation motion and pursuing discovery related to Oakley’s loss of text messages.
But Judge Sullivan denied sanctions under Rule 37(e)(1) as against Oakley’s counsel, finding that Defendants had not established they were prejudiced by counsels’ failure to take reasonable steps to ensure the preservation of Oakley’s text messages. Id. at *9. Judge Sullivan noted that Oakley had admitted he knew about his obligation to preserve his text messages but still allowed the messages to be destroyed when he upgraded his phone. This supported the conclusion that counsel’s negligence, “though troubling, did not cause the destruction of Oakley’s messages.”
Judge Sullivan next considered whether sanctions in the form of dismissal or an adverse-inference instruction were appropriate under Rule 37(e)(2), which “requires a finding of intent to deprive another party of the information’s use in the litigation.” Judge Sullivan concluded that Defendants had established “by a preponderance of the evidence that Oakley acted with the intent to deprive MSG of his text messages in this litigation” based on evidence that Oakley knew he had a duty to preserve documents relating to his claims, never imaged his phone, and never attempted to back up his messages to a cloud-based storage service. Judge Sullivan concluded that Oakley’s failure to take any steps whatsoever to preserve his text messages was “so stunningly derelict as to evince intentionality.”
Judge Sullivan supported his finding of intent with reference to a four-step test set forth in Charlestown Cap. Advisors, LLC v. Acero Junction, Inc., 337 F.R.D. 47, 59 (S.D.N.Y. 2020). Id. at *10. Under this test, Judge Sullivan concluded that (1) the missing text messages could fairly have been material to Defendants’ defense; (2) Oakley engaged in affirmative acts that caused his text messages to be lost; (3) Oakley admitted that he knew he had an obligation to preserve his text messages; and (4) Oakley’s loss of his text messages cannot be credibly explained as involving anything other than bad faith. In this regard, Judge Sullivan explained that courts have “previously inferred intentionality when the spoliating party’s explanations about an electronic device breaking were shockingly vague about what actually happened” and did not “provide any details or factual support.”
Having concluded that Oakley acted with the intent to deprive Defendants of his text messages, Judge Sullivan turned to the appropriate remedy under Rule 37(e)(2). Id. at *11. Judge Sullivan declined to dismiss Oakley’s case, noting that this would be a “drastic remedy” that “should be imposed only in extreme circumstances, usually after consideration of alternative, less drastic sanctions.”
Judge Sullivan explained that an adverse-inference instruction may better serve “prophylactic, punitive, and remedial rationales based on the commonsensical proposition that the drawing of an adverse inference against parties who destroy evidence (1) will deter such destruction, (2) will properly place the risk of an erroneous judgment on the party that wrongfully created the risk,” and (3) will “restore the prejudiced party to the same position it would have been in absent the wrongful destruction of evidence by the opposing party.” He therefore granted Defendants’ request for an adverse-inference instruction, noting that “[t]he precise content of that instruction will be determined by the Court prior to trial.”
In this action alleging violated the Defend Trade Secrets Act, Plaintiff claimed that Defendants stole Plaintiff’s trade secrets and confidential customer contact and business information and used it for the benefit of their new employer. Id. at *1. Several disputes arose among the parties in discovery, and both Plaintiff and Defendants filed motions to compel.
Among other discovery motions, Plaintiff filed a motion to compel Defendants to identify specific Bates ranges in their production that corresponded to Plaintiff’s specific document requests, which Plaintiff claimed was required under Rule 34. Id. at *2.
Magistrate Judge Kim explained that Rule 34(b)(2)(E)(i) requires a party to “produce documents as they are kept in the usual course of business” or “label produced documents to correspond to the categories in the request.” He further explained that Rule 34(b)(2)(E)(ii) requires a party to produce ESI only “in the form in which it is ordinarily maintained or in a reasonably usable form.” Magistrate Judge Kim cited to Montania v. Aetna Casualty and Surety Co., 153 F.R.D. 620, 621 (N.D. Ill. Feb. 11, 1994), in which the court compelled the plaintiff to specify which of around 17,000 pages of documents spread across eight boxes corresponded to the defendant’s specific document requests, but noted that courts “are split on whether the organization requirements in Rule 34(b)(2)(E)(i) apply to ESI and hard copy documents alike.”
Magistrate Judge Kim stated that “[t]he majority view is that Rule 34(b)(2)(E)(i)’s disjunctive organization requirement exists alongside Rule 34(b)(2)(E)(ii)’s separate ESI formatting requirements and applies to both ESI and hard copy documents.” Id. at *3 (citing cases). But he noted that “some courts have held that the organizational requirements of Rule 34(b)(2)(E)(i) do not apply to ESI productions, and a road map is not required for ESI productions under Rule 34.” In particular, he cited to In re Hair Relaxer Mktg. Sales Pracs. & Prods. Liab. Litig., No. 23 CV 0818, 2024 WL 3153321 (N.D. Ill. March 1, 2024), in which the court concluded that “treating ESI differently under the Rules is justified because ESI is generally text-searchable while hard copy documents are not.”
But Magistrate Judge Kim concluded that “the majority view” was correct because it “comports with the Advisory Committee’s goal in rewriting Rule 34(b): to enact protections — like those adopted in 1980 for paper productions — that prevent parties from producing ESI in a way that creates obstacles for the receiving party.” He explained that discovery responses “have significant evidentiary value as they constitute party admissions,” but “without a clear connection between the discovery requests and the corresponding responses, the discovery responses cannot be deemed reliable.”
Magistrate Judge Kim also rejected Defendant’s argument that Plaintiff was not entitled to “organizational information” because Plaintiff did not request such information in its requests for documents. Magistrate Judge Kim noted that Rule 34(b)(2)(E)(i) and (ii) set forth “organizational and formatting requirements,” and “[a] litigant need not instruct the opposing side to comply with the Federal Rules of Civil Procedure when responding to discovery requests.” Accordingly, Magistrate Judge Kim ordered Defendant to “ensure its ESI production corresponds to specific document requests.”
Magistrate Judge Kim then turned to Defendants’ motion to compel against the Plaintiff, in which they sought an order requiring Plaintiff to describe its ESI search protocol, including the identity of the Plaintiff’s custodians, the sources of information, the search terms Plaintiff used to identify responsive ESI, and the “temporal limitations applied to the ESI search.” Id. at *5. Defendants supported their motion by pointing to the fact that Plaintiff produced emails that appeared to be self-collected in that they were “internally forwarded” copies. Defendant argued that this “likely resulted in inappropriately narrow or incomplete searches and productions.”
In response, Plaintiff argued that the parties never agreed on an ESI search protocol and therefore were “left to their own devices.” Plaintiff also argued that Defendants never requested specifics on Plaintiff’s search process in an interrogatory.
Magistrate Judge Kim noted that “[d]iscovery on discovery is generally disfavored,” because parties responding to discovery are “best situated to evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own [ESI].” Id. (quoting from The Sedona Conference, The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, 19 Sedona Conf. J. 52 (2018)). But he noted that such discovery would be warranted “where the requesting party proves a specific discovery deficiency in the responding party’s production.”
Magistrate Judge Kim held that Plaintiff did not have to disclose its ESI search protocol because the apparent self-collection of Plaintiff’s discovery materials and the production of forwarded copies of emails rather than the originals did not prove “the existence of a specific discovery deficiency.” Id. at *6. But in light of the “genuine concerns around the adequacy of [Plaintiff’s] search and collection,” he ordered Plaintiff to “re-search its records and produce the original documents — including responsive emails — rather than forwarded copies, which would allow [Defendants] to assess and ensure authenticity and completeness of the production.” He also ordered that Plaintiff would have to “confirm compliance with Rule 26(g)” in connection with its re-production.
In this action for breach of contract, tortious interference with contract, unfair competition, and misappropriation of trade secrets, the parties found themselves “embroiled in contentious discovery disputes” in what Magistrate Judge Carlson called “a case which threatens to become an epic of dysfunctional discovery.” Id. at *1.
The instant dispute stemmed from “ongoing disagreements regarding how to best search for [ESI].” In particular, the parties could not agree regarding ESI search protocols relating to two discovery requests. Earlier in the case, the parties had disputed the appropriate search terms to apply to Plaintiff’s documents, with Defendants’ proposed search terms yielding more than 100,000 hits while Plaintiff’s proposed terms yielded only around 2,000 hits. Id. at *3. Confronted with this “gulf of more than 100,000 records,” the court had ordered the parties’ counsel and ESI vendors to meet in person “to develop and fully implement a collaborative data-driven sample testing strategy to determine which of the remaining approximately 100,000 records identified by the defendants’ search terms may also be relevant and proportionate to the needs of this case.”
When the parties failed to come to any agreement regarding the ESI protocol, they filed competing motions reflecting a number of disagreements, including (1) cost sharing for the expense of discovery, (2) procedures for culling and refining samples from the 100,000 disputed documents, (3) whether the documents should be produced in a native format with metadata, (4) which counsel would review the documents for relevance, (5) how many counsel would be involved in this discovery process, (6) how to dispose of documents that all parties agreed were irrelevant, and (7) whether counsel should be required to exchange affidavits relating to this process.
At the outset, Magistrate Judge Carlson noted that “it is emblematic of the parties’ inability to cooperate and communicate that their latest submissions concerning the ESI issues in this case contain two utterly irreconcilable competing narratives regarding the course of an in-person meet and confer” and expressed that “[c]ounsel can, should, and must do better.”
Magistrate Judge Carlson began his analysis with a lengthy discussion of the rules that applied to the parties’ dispute. In particular, he explained that courts have broad discretion regarding the “proper scope” and “conduct of discovery” but that discretion is “limited in a number of significant ways by the scope of Rule 26 itself, which provides for discovery of only nonprivileged matter that is relevant to any party’s claim or defense.” Id. at *1-2. He further noted that Rule 26 permits “discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense, taking into consideration whether the discovery is proportional to the needs of the case” under Rule 26(b)(1).
Turning to the merits of the parties’ dispute, Magistrate Judge Carlson addressed each of the parties’ disputes in turn, starting with cost sharing. Id. at *4. He noted that “ESI discovery can be a costly proposition” and that cost considerations could affect the position of both parties. Magistrate Judge Carlson stated that “[i]t is well settled, particularly in the context of cost intensive and contested ESI discovery, that the court may in the exercise of its discretion order cost sharing by the parties, particularly when dealing with sophisticated parties who have the apparent resources to engage in detailed discovery.” He further explained that cost sharing “encourages the parties to come up with a discovery plan that is time and cost efficient” and “enables the party requesting discovery to engage in a more fully informed discovery cost-benefit analysis.” Accordingly, he held that the parties were to share the costs of future ESI discovery as part of any ESI protocol.
Magistrate Judge Carlson next addressed ESI sampling procedures. Defendants argued for a random sample of 1/10 or 1/20 of the 100,000 records, whereas Plaintiff proposed “a somewhat more targeted and analytical approach in that it recommends that the parties agree upon the culling of a smaller statistically valid random sample of these records and then use predictive analytics to identify from these documents the records which appear to have the highest degree of relevance to the issues in this case.” Magistrate Judge Carlson concluded that “a technology assisted review [TAR] … process which uses computer software that learns to distinguish between responsive and non-responsive documents based on coding decisions made by knowledgeable reviewers on a subset of the document collection, to establish search parameters for the entire collection is the most efficient and effective way in which to proceed.” He further ordered that the parties’ ESI protocol “should draw upon a statistically valid random sample and then include a TAR procedure aimed at using this smaller sample to define search parameters which achieve a 95% accuracy rate when reviewing these records.”
With respect to the parties’ dispute over metadata, Magistrate Judge Carlson agreed with Defendants that ESI should be produced in its native format with accompanying metadata.
Next, Magistrate Judge Carlson declined to impose any limits on the number of counsel from each party who could participate in a review of the various samples culled as part of the parties’ ESI discovery process. Instead, he ordered the parties to “implement procedures which provide for mutual inspection of any samples drawn from these disputed records to determine sample relevance and refine search parameters.” Magistrate Judge Carlson also declined to require any counsel to submit affidavits attesting under oath to certain aspects of the parties’ ESI discovery process. Id. at *5. He explained that attorneys “are officers of the court, who have a legal and ethical duty of candor to the court and opposing counsel.” He therefore did not view counsel affidavits as necessary.
Finally, Magistrate Judge Carlson ordered that the parties’ ESI protocol provide for the prompt return or destruction of irrelevant information, because the parties’ “ESI discovery procedures will inevitably entail some disclosures of documents that are not relevant, particularly as parties refine their search parameters.”
In this action for employment discrimination brought pursuant to the Family and Medical Leave Act, Plaintiff requested information from an employee of Defendant, Allison Deleget. Id. at *1. In response, Deleget searched her phone for relevant text messages, took screenshots of those messages, and turned them over to counsel for Defendant. Id. at *2. Deleget did not have any text messages from before December 2023, because she had obtained a new cellphone before the lawsuit was filed, and older text messages were not transferred to the new device. Deleget’s phone did not save messages to iCloud. Plaintiff filed a motion to compel a forensic examination of Deleget’s phone, claiming that such an examination “might uncover backup messages or synced data.”
Judge Vargas found that Plaintiff had not met her burden to establish good cause for the forensic examination. Judge Vargas explained that “[f]orensic examinations of computers and cell phones are generally considered a drastic discovery measure because of their intrusive nature.” But she noted that forensic examination could be appropriate if “there is reason to believe that a litigant has tampered with the device or hidden relevant materials.”
Judge Vargas took note of the fact that Deleget was a third-party witness and rejected the notion that expecting Deleget to hire an ESI vendor “to search her phone for a limited set of text messages” was not “reasonable or proportionate.” She also noted that it would be unreasonable to expect Deleget “to turn over her personal phone, containing all manner of personal and private information, to her employer to conduct an invasive and intrusive search.”
Judge Vargas also rejected Plaintiff’s claim that the loss of Deleget’s texts amounted to spoliation. Id. at *3. She noted that Plaintiff did not argue that Defendant engaged in spoliation; rather she argued that Deleget engaged in spoliation by changing phones. Judge Vargas expressed doubt that Deleget’s actions could be imputed to Defendant, but in any event she concluded that there could be no spoliation because Defendant was not under an obligation to preserve Deleget’s texts. Judge Vargas explained that Deleget was “not one of the employees whose actions are at issue in this lawsuit.”
Information on past notable cases and events in eDiscovery can be found here.
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