Federal Court Decisions Involving Electronic Discovery, December 1 ...

Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009
the plaintiff’s failure to produce requested electronic discovery. The plaintiff responded
by claiming that the failure was due to the inadequate “key words” supplied by the
defendant to conduct the search. The court refused to accept that excuse, stating that the
responding party had an independent obligation to produce requested information or seek
clarification of the request. A hearing was ordered to determine the extent of the
plaintiff’s culpability and whether the default sanction would be appropriate.
In re Fannie Mae Securities Litigation, 552 F.3d 814 (D.C. Cir. 2009). In this appeal
taken by the Office of Federal Housing Enterprise Oversight (OFHEO) from a contempt
order entered against it for failing to comply with a discovery deadline, the Circuit Court
of Appeals affirmed the contempt order, holding that the District Court had not abused its
discretion. Subpoenas had been issued to the OFHEO, a non-party, in civil litigation
seeking “records it collected in performing its oversight functions and preparing its
investigative report” of Fannie Mae. Following the entry of an order to compel
production, a Rule 30(b)(6) deposition, and a contempt motion arising out of the
OFHEO’s failure to produce the requested ESI, the OFHEO entered into an agreement
with the subpoenaing parties leading to the designation of over 400 search terms resulting
in the identification of 660,000 documents. After further judicial intervention, the
OFHEO hired 50 contract attorneys and expended over 9% of its annual budget in an
attempt to comply with the production schedule, but could not do so. The District Court
concluded that the OFHEO’s efforts were “not only legally insufficient, but too little too
late,” held the OFHEO in contempt, and ordered production without waiver of privilege
of all documents not logged by the production deadline. Holding the OFHEO to the
stipulated agreement, the Court of Appeals noted that the OFHEO could have refused to
enter into the agreement, contested the discovery motions, or defied the adverse ruling,
thus preserving its rights under Rule 45.
Fells v. Virginia Dep’t of Trans., 2009 WL 866178 (E.D. Va. Mar. 25, 2009). In this
racial discrimination suit, the defendant was awarded summary judgment and costs as the
prevailing party. The defendant claimed that the cost of creating electronically searchable
documents, including “electronic records initial processing, [m]etadata extraction, and
file conversion,” should be included as “costs” under 28 U.S.C. § 1920. However, the
court held that it may not award costs for scanning documents, because scanning was not
specifically claimed. The court reasoned that taxable costs under § 1920 did not include
processing records, extracting data, and converting files, which served to create
searchable documents, rather than scanning and reproducing paper documents in
electronic form.
Fendi Adele S.R.L. v. Filene's Basement, Inc., 2009 U.S. Dist. LEXIS 32615
(S.D.N.Y. Mar. 24, 2009). In this trademark infringement case for counterfeit bags, the
plaintiff filed a motion seeking sanctions against the defendant for multiple alleged
discovery omissions. Citing Fed. R. Civ. P. 26(g)(1) and 37(b), the court concluded that
defendants repeated and extended discovery failures in locating and producing all of the
responsive documents warranted monetary sanctions. The court reasoned that a company
of this size and sophistication should be able to maintain and produce more than the sixty
documents. However, the court denied plaintiff’s motion to shift plaintiff's cost of
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