January's Notable Cases and Events in E-Discovery

1. In Franklin v. Howard Brown Health Center, 2018 WL 5831995 (N.D. Ill. Nov. 7, 2018), Judge Marvin E. Aspen accepted a magistrate judge’s report and recommendation finding that defendant was grossly negligent in preserving instant messages sent by its employees and permitting plaintiff to present evidence of such failure to preserve at trial.

In this employment discrimination suit, plaintiff sued her former employer and requested emails and text messages from a number of employees. When disputes over such requests arose, the matter was referred to Magistrate Judge Jeffrey Cole, who issued a report and recommendation. Franklin v. Howard Brown Health Center, 2018 WL 4784668 (N.D. Ill. Oct. 4, 2018). Neither party filed any objections to the report and recommendation, and Judge Aspen adopted it in full.

Plaintiff indicated that she had intended that the request for emails and text messages also cover instant messages, as this was a standard mode of communication at the company. Id. at *1. Defendant took the position that the request did not cover instant messages and, in any event, all responsive instant messages that the employees saved had been produced. The magistrate judge concluded that the latter representation regarding the production of responsive messages was false.

In the proceedings before Magistrate Judge Cole, defendant initially stated that when plaintiff threatened litigation in 2015, it issued a litigation hold that covered all emails and instant messages relevant to plaintiff. Id. at *2. But over time, defendant was forced to admit that the litigation hold was not timely issued or properly administered. In fact, the litigation hold was not issued until a month after plaintiff first threatened litigation. During the time between threatened litigation and the litigation hold, defendant wiped the computer of a former employee subsequently named in the lawsuit. In addition, although defendant’s general counsel claimed that she instructed the IT department in 2015 to remove plaintiff’s computer from the regular deletion process, there was no indication that anyone ever confirmed that the computer had been secured. Indeed, by the time plaintiff filed her employment discrimination lawsuit in 2017, defendant could not locate her computer. Id. at *3.

Regarding the instant messages that plaintiff requested, defendant initially stated that they were not saved unless one of the participants specifically saved the conversation as an email when the conversation concluded. Id. at *4. One month later, however, defendant submitted an affidavit from an IT manager explaining that instant messages were automatically stored in a “conversation history” folder in the user’s email account unless the user affirmatively opted to not save the message. The retention period for the message varied depending on the size of the file but could be stored for up to two years before being automatically deleted. Once deleted, the messages could not be recovered. Defendant admitted that at the beginning of the litigation it never instructed anyone to stop instant messages from being automatically deleted. Defendant’s general counsel claimed that she was under the erroneous impression that the messages were saved on a cloud-based server for 10 years. In the end, defendant was able to produce only a “handful” of messages in discovery.

On the basis of defendant’s failure to preserve relevant text messages, Magistrate Judge Cole concluded that sanctions were warranted under Rule 37(e). Id. at *5. Magistrate Judge Cole considered what sanctions might be appropriate under Rule 37(e)(1) because plaintiff did not argue that defendant had acted with the intent to deprive provisions of Rule 37(e)(2). If defendant had acted with such intent to deprive plaintiff of the information’s use in the litigation, Magistrate Judge Cole would have been free to consider whether to give an adverse-inference instruction or impose case-ending sanctions under Rule 37(e)(2). In opposing sanctions, defendant argued that the instant messages — which allegedly contained evidence that defendant’s employees were “bullying” plaintiff — were not relevant to plaintiff’s core claim of sexual harassment. Id. at *5. Magistrate Judge Cole rejected this argument, explaining that the concept of relevance is “expansive and inclusive” and evidence of bullying could have been used to support a claim of sexual harassment. Id. at *6. He found that “defendant’s gross negligence — and that’s viewing things favorably to defendant” warranted the sanction set forth in the 2015 Advisory Committee notes — “allowing the parties to present evidence to the jury regarding the situation that was caused by defendant’s faulty and failed litigation hold.” Id. at *7. The magistrate judge stated that the evidence to be allowed and the extent of the litigation hold issues were matters to be decided at trial by the presiding judge.

2. In d’Amico Dry v. Nikka Finance, Inc., 2018 WL 5116094 (S.D. Ala. Oct. 19, 2018), Magistrate Judge P. Bradley Murray denied defendant’s motion for a protective order that sought to protect its Rule 30(b)(6) deponent from a videotaped deposition.

In this admiralty action, plaintiff sought to enforce a foreign judgment against defendant as an alter ego of the defendant named in the judgment. Id. at *1. During discovery, the parties could not agree on a time and location for the Rule 30(b)(6) deposition of defendant’s representative but did so after intervention by Magistrate Judge Murray. Defendant, however, filed a motion for a protective order under Rule 26(c) in advance of the deposition seeking to prohibit plaintiff from videotaping the deposition. Id. at *2. Defendant presented four arguments in favor of the protective order. Magistrate Judge Murray rejected each argument and concluded that good cause did not exist for entry of a protective order. Id. at *4.

First, defendant argued that plaintiff had failed to specify in its original deposition notice that the deposition would be videotaped. Id. at *2. Under Rule 30(b)(3)(A), “[t]he party who notices the deposition must state in the notice the method [that is, audio, audiovisual, or stenographic means] for recording the testimony.” Id. at *3. Magistrate Judge Murray concluded that videotaping was still permitted because Rule 30(b)(3) also provides that “[w]ith prior notice to the deponent and other parties, any party may designate another method for recording the testimony in addition to that specified in the original notice.” This means that the party who noticed the deposition can later designate another method for recording the deponent’s testimony.

Second, defendant argued that plaintiff wanted to videotape the deposition to intimidate and harass the deponent and cause him annoyance, embarrassment and oppression. Defendant’s theory was that the deponent had been deposed by plaintiff in previous related litigation without videotaping. Magistrate Judge Murray rejected this theory, noting that plaintiff had a legitimate interest in videotaping the deposition should the deponent, who lived in Greece, opt to not appear at trial and that it was mere speculation that the videotaping was being done for an improper purpose. Id.

Third, defendant argued that the deponent refused to sign a release authorizing the videotaped deposition and, in the absence of a release, the videotaped deposition, which would take place in London, would violate the deponent’s right to privacy under the Data Protection Act and European Union Data Protection Regulations 2018 and the European Convention on Human Rights and the Human Rights Act. Id. at *4. Interpreting the various provisions of the laws cited by defendant, Magistrate Judge Murray concluded that they prohibited only the use of videotaped images of persons who were unaware of the videotaping. To ease the deponent’s privacy concerns, however, Magistrate Judge Murray ordered that the video recording not be publicly disclosed or used in other proceedings.

3. In In re Abilify (Aripiprazole) Products Liability Litigation, 2018 WL 4440707 (N.D. Fl. Sept. 17, 2018), Magistrate Judge Gary R. Jones granted defendant’s motion to claw back portions of a PowerPoint presentation that it claimed were privileged and inadvertently produced.

This dispute concerned the inadvertent production by Bristol-Myers Squib Co. (BMS) of a PowerPoint deck discussing the company’s corporate integrity agreement (CIA). During a BMS executive’s deposition, BMS’s counsel objected that this document contained inadvertently produced privileged and confidential information, stating to plaintiffs’ counsel that it was exercising its claw-back rights under the protective order as the presentation had been drafted in part by in-house counsel and had been presented by a senior BMS lawyer. After the deposition, BMS sent an email to plaintiffs’ counsel stating that it was seeking to claw back a portion of the presentation as inadvertently produced, and three business days after the deposition provided plaintiffs with a privilege log articulating the basis for the claw back and thereafter produced a redacted version of the presentation and the transmittal email.

Plaintiffs argued that (1) BMS waived its privilege because it failed to provide written notice within two business days of the deposition, accompanied by a privilege log, as required by the protective order and (2) the claims of privilege were incorrect as the documents were codrafted by a nonlawyer and did not contain legal advice.

The magistrate judge rejected both arguments. Regarding the timeliness issue, he found that BMS’s lawyers accurately notified plaintiffs at the deposition of the grounds for the claw back and that the one-day delay in providing the written privilege log was a case of “no harm, no foul.” Id. at *2. Regarding the substantive privilege issue, the magistrate judge explained that the fact that a nonattorney had participated in drafting the presentation and was listed as the “author” in the document’s metadata was not dispositive: “BMS affirmatively represent[ed] that the PowerPoint slides indeed were authored by both BMS employees and BMS in-house counsel.” And “the fact that the meta data reflects the deck was prepared by a non-attorney has little relevance to whether the PowerPoint is protected by the attorney-client privilege.” Further, the magistrate judge noted that plaintiffs were correct that some of the material BMS sought to protect were factual summaries, but he stated that this claim missed the larger privilege point. Viewed in the context that this was a presentation by a senior BMS counsel, this information was “not simply a historical account of the CIA but instead [counsel’s] interpretation of the scope of BMS’ obligation under the CIA.” Id. at *3. As the magistrate judge explained,

In evaluating whether the information in the PowerPoint is privileged the Court cannot view the PowerPoint slides in a vacuum, as Plaintiffs suggest, but rather must view the slides in the context in which they were prepared and how the slides were used. Because the information in the PowerPoint slides was prepared by in-house counsel (albeit with the assistance of a non-lawyer) and expressly was utilized by in-house counsel in a presentation to management employees concerning in-house counsel’s interpretation of the scope of BMS’ obligations under the CIA, the portions of the PowerPoint slide deck redacted by BMS are privileged and therefore BMS has the right under the claw back to recall those portions of the PowerPoint slide deck.

The magistrate judge therefore denied plaintiffs’ motion.

4. In In re Taxotere (Docetaxel) Products Liability Litigation, 2018 WL 4002624 (E.D. La. Aug. 22, 2018), Judge Jane Triche Milazzo imposed monetary sanctions on a bellwether plaintiff pursuant to Fed. R. Civ. P. 37(b)(2)(A) for repeated and willful failures to comply with her discovery obligations.

Dr. Kelly Gahan served as a bellwether plaintiff in a products liability case against defendants Sanofi-aventis U.S. LLC and Sanofi US Service Inc. (collectively, Sanofi) regarding Taxotere, a chemotherapy drug. Defendants asserted that Gahan had been treated experimentally for hair regrowth in 2017 by Dr. David Weinstein and that she often emailed him “progress” photos highlighting hair regrowth. Despite this, Gahan did not list Weinstein on her plaintiff fact sheet (PFS), which asked her to identify any physicians who had treated her over an eight-year period and to disclose whether she had used nonprescription hair loss treatments. Defendants discovered the relationship when reviewing her email correspondence produced in the lawsuit. In one email dated July 28, 2017, Weinstein asked Gahan if he could use the “progress” photos to promote his treatment method. Gahan responded: “I think that should be okay. How widely will they be distributed? Would rather not have the lawyers for the other side put two and two together just yet.” Weinstein wrote that distribution would be limited. Id. at *1 (footnotes omitted).

Sanofi then notified plaintiffs’ counsel that it intended to seek Weinstein’s treatment records. Gahan testified in her deposition that she then told Weinstein to “just tell [defense counsel] that you weren’t really my doctor ... you don’t have any records [and] you never saw me.” Weinstein failed to produce the records, and Sanofi subpoenaed him. Before doing so, however, Gahan heard about the subpoena and warned Weinstein in a text message: “Hi, just a heads up the opposing side is going to subpoena you in the next day or two. The judge ordered all my emails released and they must have gleaned your name off them.” Id.

Defendants also learned during briefing on the motion for sanctions that Gahan had sought to hide her employment records from her time as an employee of the Denver Veterans Affairs Center by instructing the Department of Veterans Affairs not to release her employment or medical records because she would be doing so herself, an action she did not take. Id. at *3.

Sanofi’s motion to sanction Gahan sought to punish her for failing to comply with her discovery obligations. As the court explained, Rule 37(b)(2)(A) authorizes judicial imposition of “just” sanctions against parties who refuse to obey a valid discovery order. “As explained by the Fifth Circuit, under Rule 37(b), an award of expenses is warranted for the failure to obey a discovery order ‘unless the disobedient party establishes that the failure was substantially justified or that other circumstances make an award of expenses unjust.’ ” Id. at *2 (quoting F.D.I.C. v. Conner, 20 F.3d 1376, 1382 (5th Cir. 1994)). If monetary sanctions will not have an adequate deterrent effect, the district court may order dismissal, though this is a “draconian remedy” that should be invoked only if the refusal to comply arose from “willfulness or bad faith” and the party had a “clear record of delay or contumacious conduct.” Id. (quoting Conner, 20 F.3d at 1380).

In this case, defendants asserted that Gahan had intentionally submitted incomplete and materially inaccurate PFSs, had intentionally withheld information about treating physician Weinstein, had instructed Weinstein to withhold records from defendants, had encouraged custodians of third-party records to similarly evade defendants’ requests for information and had withheld hundreds of photographs of her hair regrowth. In defendants’ view, such conduct established a record of willful delay and bad faith and justified dismissal with prejudice and additional sanctions ranging from in camera review of Gahan’s correspondence with her attorneys to see if additional misconduct occurred, to monetary sanctions, to redeposition and supplemental discovery, attorney fees and perhaps even her removal as a bellwether plaintiff.

Gahan contended that she never considered Weinstein to be her physician as his work was done exclusively as a researcher and that she was never asked to supplement her PFSs. The court found this unconvincing, explaining that Gahan was “a sophisticated plaintiff” whose conduct at the very least was negligent. “By repeatedly omitting [the] information [about Dr. Weinstein,] Dr. Gahan ha[d] failed to comply with her discovery obligations,” she had “provided no explanation for why she instructed the VA Center not to release her records” and “her correspondence with Dr. Weinstein about Sanofi’s request for his records demonstrates that she has encouraged at least one other potential witness to be less than forthcoming in this litigation.” Id. at *4. As the court went on to explain, however,

Because dismissal with prejudice is a remedy of last resort, the Court refrains from ordering a dismissal at this time. Consistent with this, the Court finds it unnecessary at this time to conduct an in camera review of the correspondence between Dr. Gahan and her counsel or inspect Dr. Gahan’s computer, as Defendants request. The law makes clear, however, that a sanction is appropriate if a party unjustifiably violates his or her discovery obligations. Thus, an award of expenses is warranted. Further, the Court will order that Plaintiff release any additional relevant information that she has in her custody and has failed to produce.

The court also threatened dismissal if any further misconduct occurred and stated that if it “learn[ed] that any other plaintiff ha[d] intentionally withheld relevant information,” it would “impose severe sanctions, which may include dismissal with prejudice.” Id.