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

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Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 sanctions were not appropriate because the documents were deleted as part of a routine document retention policy. Southern New England Tel. Co. v. Global NAPs, Inc., 2008 WL 2568567 (D. Conn. June 23, 2008). A telecommunications company sued a long-distance service for misrouting long-distance traffic to avoid paying applicable access changes, resulting in a Prejudgment Remedy against the defendants in the amount of $5.25 million. In further proceedings, the plaintiffs sought discovery of the defendant’s corporate structure, assets, and financial condition. The defendant stalled on producing any financial statements, tax returns, accounting records, or other documents, claiming that they were not in the defendant’s “custody or control,” but in the hands of various nonparties. Later the defendant claimed that the office computer containing relevant data was dropped down a flight of stairs and removed from the office in pieces, never to be seen again. Later forensic analysis of the replacement computer revealed the use of file and disk-wiping utilities. The court found that the defendants engaged in the systematic, intentional destruction of evidence and made “willfully false” representations to the court, in violation of discovery orders and warnings from the court that continued discovery abuse would “likely result in the entry of default judgment.” The court characterized the defendant’s behavior as “the type of willful disregard for the process of discovery created by the Federal Rules of Civil Procedure that warrants the ultimate sanction of dismissal,” and entered judgment against all the defendants, jointly and severally, for $5.25 million, plus attorneys fees and costs in excess of $600,000. Spicer v. Universal Forest Products, 2008 U.S. Dist. LEXIS 77232 (W.D. Va. Oct. 1, 2008). In this employment discrimination case, the plaintiff alleged that he was wrongfully terminated because of age and disability. The plaintiff moved for sanctions against the defendant for failing to provide relevant and responsive documents. The court noted its concern that the defendant was parsing the plaintiff's requests too narrowly. As a result, the court ordered that any relevant documents in the defendant's possession, custody or control that had not been previously produced must be produced to plaintiff by a date certain. The court then noted that the defendant’s failure to identify individuals involved in the firing of the employee was cause for concern, resulting in an order that the defendant make those individuals available for deposition at the defendant's expense prior to trial. The court also noted that the defendant had been consistently late in its discovery responses, but usually by only one or two days, so no sanction was warranted. Finally, citing Fed. R. Civ. P. 30(b)(6) and 37(b)(2), the court ruled that the defendant's designated witness was grossly unprepared to speak for the defendant's corporation on the issues in this case. The court held that sanctions were appropriate and ordered the defendant to pay plaintiff counsel's costs and fees associated with the preparation and taking of various Rule 30(b)(6) depositions. Spieker v. Quest Cherokee, LLC., 2009 WL 2168892 (D. Kan. July 21, 2009). In this sequel to an earlier decision, Spieker v. Quest Cherokee, LLC, 2008 U.S. Dist. LEXIS 88103 (D. Kan. Oct. 30, 2008), the court revisited the request of the individual plaintiffs for discovery of ESI. The court had denied an earlier motion based on the estimated cost of compliance, the failure of the plaintiffs to demonstrate the relevance of the ESI sought to the issue of class certification, and the lack of information to develop a reasonable Copyright © 2009, The Sedona Conference ® 80 www.thesedonaconference.org
Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 search protocol. On the renewed motion, the court found that the defendant had agreed to discovery on class certification and on the merits, thus making the ESI sought relevant. The court also found that the defendant could conduct a search using its own employees, thus making the defendant’s reliance of an estimate from a vendor “greatly exaggerated.” The court rejected the argument that the ESI was not reasonably accessible under Fed. R. Civ. P. 26(b)(2)(B), that the discovery sought was cumulative, and that interrogatories and Fed. R. Civ. P. 30(b)(6) depositions were a more efficient means to secure the information sought by the plaintiffs. However, the court rejected the plaintiffs’ suggestion that the defendant could simply turn its ESI over to them for searching under a Fed. R. Civ. P. 26(b)(5)(B) protective order and Fed. R. Evid. 502(b) nonwaiver order. These orders would still require the defendant to conduct a “reasonable” and allegedly expensive, privilege review beforehand. Spieker v. Quest Cherokee, LLC, 2008 WL 4758604 (D. Kan. Oct. 30, 2008). In a putative class action over mineral lease royalty payments, the parties engaged in extensive negotiations over the defendant’s production of ESI, including the use of search terms to identify potentially relevant files. The search terms resulted in identifying 32 gigabytes of data or an estimated 1.4 million pages of documents. The defendant refused to incur the anticipated production costs, including the document review costs, and the plaintiffs refused to narrow the scope of the key word search. The court held that the proposed discovery costs were disproportionate to the amount at stake at this stage of the litigation, as the class had not yet been certified, the discovery was not relevant to class certification issues, and the named plaintiffs claims did not exceed $100,000. However, the court held open the possibility that at a later stage the proposed discovery may be proportionate to the amount at issue should a class be certified, and at that time the parties may want to consider reducing the document review costs by taking advantage of Fed. R. Evid. 502. Sprenger v. Rector and Board of Visitor of Virginia Tech, 2008 WL 2465236 (W.D. Va. June 17, 2008). In an employment discrimination suit against a state university, the defendant issued a subpoena under Rule 45 to obtain relevant emails of the plaintiff’s husband from his employer, another state agency. The plaintiff moved to quash the subpoena on the grounds that the emails would be protected by spousal privilege. The defendant argued that the privilege did not apply, as both the husband and wife were was on notice that they had “no expectation of privacy” under the employer’s Internet use policy. Acknowledging that this was an issue of first impression in the Fourth Circuit, the court reviewed decisions from several circuits discussing the “reasonable expectation of privacy” in employer email systems and adopted a four-factor test from In Re Asia Global Crossing, Ltd., 322 B.R., 247 (Bankr. S.D.N.Y. 2005): (1) whether the employee maintained a policy on personal use of the email system; (2) whether the employer monitored employee email use; (3) whether third parties had access to the email system; and (4) whether the employee notified the employee of the policy and monitoring. Based on the “sparse” record before it, the court found that while the employer had an Internet use policy, there was no evidence that employees were notified of the policy or that employee email use was monitored. The court quashed the subpoena, but invited the defendants to move for an evidential hearing if they wished to pursue the request further. Copyright © 2009, The Sedona Conference ® 81 www.thesedonaconference.org
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