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

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Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 Scotts Co. LLC v. Liberty Mutual Insurance Co., 2007 U.S. Dist. LEXIS 43005 (S.D. Ohio June 12, 2007). In an insurance action, the plaintiff requested an order allowing its computer forensics expert to inspect the defendant’s computers. The court denied the request, stating that amended Rule 34(a) is intended to put the discovery of electronically stored information on the same footing as discovery of conventional documents, and that the plaintiff’s mere suspicion that a discovery response is incomplete is not a sufficient basis for such a search, any more than it would justify physical inspection of a document warehouse. The plaintiff also requested that the defendant be ordered to produce in electronic format documents already produced in paper. Citing both The Sedona Principles and the 2006 Advisory Committee Notes to the Rules, the court ordered the parties to meet and confer on supplementing the production. SEC v. Badian, 2009 WL 222783 (S.D.N.Y. Jan 26, 2009). Following an in camera review of documents withheld from production in response to a subpoena, the court held that privilege claims had been waived, considering four factors. First, when originally turned over to the SEC in 2003 during an earlier investigation, no precautions were shown to have been taken to protect against inadvertent disclosure of privileged information. Second, there was a five-year delay in attempting to assert privilege after the original inadvertent disclosure. Third, a “significant number” of documents had been inadvertently disclosed. Fourth, there would be no “fairness” in precluding the SEC from using the documents. SEC v. Collins & Aikman Corp, et al., 2009 U.S. Dist. LEXIS 3367 (S.D.N.Y. Jan. 13, 2009). In this securities fraud action brought by the SEC, the court addressed “important questions concerning the Government’s discovery obligations in civil litigation.” In ruling on a defendant’s objections to the manner in which the SEC responded to his requests to produce, the court held that the SEC’s production of some 1.7 million documents (10.6 million pages) in categories corresponding to the requests would not violate work product protection, and, even if it did, the difficulty of searching an unorganized collection of that size would constitute “undue burden” on the requesting party. The court also held that the collection was not assembled in the “usual course of business,” as it resulted from an investigation. Thus, the SEC did not have the option of producing it without the categorical identification. The court also found that “[t]he SEC’s blanket refusal to negotiate a workable search protocol … is patently unreasonable,” rejecting the SEC’s unilateral decision to limit its search to three divisions in response to certain requests to produce. Noting the proportionality provisions of Rule 26(b)(2)(C), the court observed that the requests “seem particularly reasonable in an action initiated by the SEC.” The court chided the parties for their failure to engage in a 26(f) process and drew their attention to The Sedona Conference® Cooperation Proclamation. Additionally, the court found that the SEC’s privilege log was deficient as a guide to its invocation of the deliberative process privilege and directed an in camera review. Finally, the court found the SEC’s blanket objection to producing email unacceptable and ordered that the parties meet and confer to develop a means to sample the email. Sentis Group, Inc. v. Shell Oil Co., 559 F.3d 888 (8th Cir. Mar. 24, 2009). Plaintiffs contended that they were improperly persuaded to enter into an operator agreement Copyright © 2009, The Sedona Conference ® 76 www.thesedonaconference.org
Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 involving gas stations and convenience stores. After a litigious discovery process, the lower court dismissed the plaintiffs’ claims with prejudice, ruling that the plaintiffs had willfully withheld documents. On appeal, the circuit court held that while some sanction may have been suitable, lesser sanctions were warranted. The court also noted that the defendants had “fann[ed] the flames” of the lower court’s displeasure with the plaintiffs instead of reasonably seeking discovery. The circuit court remanded the case to the district court, but it gave instructions to assign the case to a different judge to avoid what the court believed was a high level of antagonism in the previous action. In re September 11th Liability Insurance Coverage Cases, 243 F.R.D. 114 (S.D.N.Y. 2007). On September 11, 2001, Zurich’s chief underwriter for the United States ordered that a copy of Zurich’s policy relating to the World Trade Center be printed out for her files. The electronic copy was then deleted from Zurich’s computerized document library. Existence of the paper copy was not disclosed until after depositions in the ensuing litigation had been completed. The court found that Zurich’s “culpable state of mind” in causing the key document to be “buried in a box for nearly two years” justified imposition of $750,000 in sanctions under Rule 11 as well as $500,000 in sanctions under Rule 37. In re Seroquel Products Liability Litigation MDL Docket No. 1769, 2007 U.S. Dist. LEXIS 5877 (M.D. Fla. Jan. 26, 2007). In a multidistrict pharmaceutical products liability case, a detailed Case Management Order requires the defendant to produce documents in .tif format with an accompanying full-text database to allow word searching and a “load file” consisting of 17 items of metadata for each document. The order also addresses initial cost allocation, data preservation, and the production of databases. In re Seroquel Products Liability Litigation, 244 F.R.D. 650 (M.D. Fla. 2007). In this multidistrict pharmaceutical products liability litigation, the judge relies heavily on The Sedona Principles and the Manual for Complex Litigation (4 th ) to find that the defendants engaged in “purposeful sluggishness.” Sanctionable conduct included producing electronically stored information without necessary metadata; producing multi-page TIFF images, some of which consisted of more than 20,000 pages; producing electronic documents without apparent bates numbering; producing 8% of the entire production as one lengthy document which could only be opened with a very powerful work station; and producing electronic files with no load files, rendering the production inaccessible and unusable. In addition, the plaintiff employed a “plainly inadequate” key word methodology “in secret” to cull responsive documents from the collections of 80 custodians, instead of engaging in a cooperative process with the plaintiff, and did not cooperate in good faith to identify responsive databases. The court noted that these and other technical problems “likely could have been resolved far sooner and less expensively had [the defendant] cooperated by fostering consultation between the technical staffs responsible for production. Instead, [the defendant] shielded its third party technical contractor from all contact with Plaintiffs. This approach is antithetical to the Sedona Principles and is not an indicium of good faith.” The court reserved a determination of Copyright © 2009, The Sedona Conference ® 77 www.thesedonaconference.org
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