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

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Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 discovery of electronically stored information (ESI). These guidelines were based in large part on the “Suggested Protocol for Discovery of Electronically Stored Information” of the United States District Court for the District of Maryland. That full document may be found at http://www.mdd.uscourts.gov/news/news/ESIProtocol.pdf. Opperman, et al. v. Allstate New Jersey Ins. Co., et al., 2008 WL 5071044 (D.N.J. Nov. 24, 2008). In this action challenging the defendant insurer’s property loss estimates, the court ordered the production, in accessible form, of proprietary software owned by a nonparty and licensed to the insurer. The court found that the software was relevant to the plaintiff’s claims and that an existing confidentiality order would protect the trade secret nature of the software. The court also rejected the proposition that a nonparty could prohibit production of the software. Oracle Corp. v. SAP AG, No. C-07-01658 (N.D. Cal. July 3, 2008). In a dispute between two major business software companies involving the alleged unlawful downloading of software and support materials in which the plaintiff claims damages of “at least a billion dollars,” discovery of the documents of 165 key custodians will cost the defendant an estimated $16.5 million and take mare than a year. Citing both Rule 26(b)(2)(C) and the mandate of Rule 1 (“the just, speedy, and inexpensive determination of every action and proceeding”), the Magistrate Judge ordered that the number of custodians be limited to 120 and that the parties consider sampling and key word searches to limit the scope of discovery even further. Orrell v. Motorcarparts of America, Inc., 2007 U.S. Dist. LEXIS 89524, 2007 WL 4287750 (W.D.N.C. Dec. 5, 2007). In a sexual harassment suit, the plaintiff alleged that she had been the recipient of “hundreds” of offensive emails from co-workers, but could not provide them because her home computer had “crashed.” The defendant filed a motion to compel inspection of the plaintiff’s home computer by a qualified forensics technician. Applying Fed. R. Civ. P. 26(b)(2)(C), the court found the defendant’s requests to be “reasonably calculated to lead to the discovery of admissible evidence” and ordered the inspection at the defendant’s expense. Oxford House, Inc. et al. v. City of Topeka, Kansas, 2007 WL 1246200 (D. Kan. Apr. 27, 2007). In a dispute over the denial of housing permits by the City of Topeka, the plaintiff requested deleted emails from members of the City Counsel. The media from which these emails could have been derived had been routinely overwritten about two months before the plaintiff issued a demand letter. Although the developer and the City had been in active negotiation over the permits at that time, the judge held that no duty to preserve backup media had arisen, citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003). Further, while it is technologically possible to recover information from overwritten backup media, the estimated $100,000 cost was not justified by the low probability that any information relevant to this action would be recovered. Pace v. International Mill Ser., Inc., 2007 U.S. Dist. LEXIS 34104, 2007 WL 1385385 (N.D. Ind. May 7, 2007). In an employment discrimination suit, the plaintiff requested records of work orders showing the distribution of work assignments to other employees Copyright © 2009, The Sedona Conference ® 62 www.thesedonaconference.org
Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 of the defendant. The defendant first responded with information in .pdf format. After objection by the plaintiff, the defendant produced the information again as commaseparated data. That production was again supplemented by the defendant, although the plaintiff alleged that information was still missing and filed a motion to compel production in native format. Citing Principle 12 of The Sedona Principles and Williams v. Sprint/United Management, 230 F.R.D. 640 (D. Kan. 2005) for the proposition that the adequacy of the respondent’s form of production “must be gauged on a case-by-case basis, according to the specific terms of the request,” the court held that native format production was not required by Rule 34, and the plaintiff’s third motion to compel discovery and award costs was denied. Padgett v. City of Monte Sereno, 2007 U.S. Dist. LEXIS 24301 (N.D. Cal. Mar. 20, 2007). In a civil rights action involving allegations that a city employee had made anonymous threatening communications, the plaintiff moved to compel inspection of city computers. The court denied the motion but instructed the city to “preserve everything.” Shortly thereafter, the hard drive of the city manager’s laptop crashed and was discarded. The plaintiff moved for default judgment as a spoliation sanction. The court founds that while sanctions were appropriate, the plaintiff had not established prejudice to justify spoliation sanctions. The court ordered the city to pay attorneys’ fees and forensic expert costs, and the costs of a special mater to manage further discovery. Palgut v. City of Colorado Springs, 2007 U.S. Dist. LEXIS 91719, 2007 WL 4277564 (D. Colo. Dec. 3, 2007). In an employment discrimination suit against a municipal fire department, the district judge affirmed the magistrate judges ruling that the plaintiff’s requests were overbroad and unduly burdensome, and the defendant’s backup tapes were “not reasonably accessible” within the meaning of Rule 26(b)(2)(B) because the city lacked the necessary hardware to access the tapes. The court held that appointment of a computer forensics expert to examine the city’s computer system was unnecessary, as "without a qualifying reason, plaintiff is no more entitled to access to defendant's electronic information storage systems than to defendant's warehouses storing paper documents." Pandora Jewelry, LLC v. Chamilia, LLC, 2008 U.S. Dist. LEXIS 79232 (D. Md. Sept. 30, 2008). In an action for unfair trade practices and Lanham Act violations, the defendant failed to produce requested electronic discovery, stating that it lost files by changing servers twice since the start of the litigation and because its email system forces users to delete or archive emails every 90 days. The court held that the defendant’s failure to preserve relevant electronic information was “grossly negligent” and did not fall within Rule 37(e)’s protection for “routine, good-faith operation of an electronic information system.” However, the plaintiff was unable to establish that its case had been prejudiced by the defendant’s actions, and the court denied dispositive sanctions for spoliation. Parkdale America, LLC v. Travelers Casualty and Surety Company of America, Inc., 2007 U.S. Dist. LEXIS 88820, 2007 WL 4165247 (W.D.N.C. Nov. 19, 2007). In an insurance coverage dispute seeking indemnification for the settlement of private antitrust actions, the plaintiff provided 550,000 pages of email concerning the Copyright © 2009, The Sedona Conference ® 63 www.thesedonaconference.org
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