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

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Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 Square D Co. v. Scott Electric Co., 2008 WL 2779067 (W.D. Pa. July 15, 2008). In a trademark infringement action involving the sale of allegedly counterfeit circuit breakers, the court ordered the defendant to submit to a limited forensic inspection of its computer facilities, giving rise to numerous motions regarding the conduct of the inspection, including these cross-motions for sanctions. The court revisited the detailed ground rules for the inspection and criticized the defendant for raising objection to further narrow the scope of discovery on the day the inspections were to take place, particularly the defendant’s insistence that bitstream images of hard drives make by the examiner not be allowed to leave the defendant’s premises. However, the court declined to impose a sanction of default on the defendant, finding that the defendant’s action “falls just shy of conduct befitting default judgment.” The court ordered immediate compliance with previous discovery orders, fees and costs, and personal appearance by all counsel at a court status conference upon completion of the inspection. Starbucks Corporation v. ADT Security Services, Inc., 08-cv-900-JCC (W.D. Wash. Apr. 30, 2009). In a breach of contract and fraud case relating to ADT’s installation of propriety software that was not transferable to other carriers, Starbucks sought to search the relevant ESI from five key regional employees of ADT that Starbucks had worked with and the emails archived from 2003 to 2006 relating to the pending dispute stored on ADT’s Plasmon System. The defendant argued that producing ESI from the Plasmon System would be too costly. Citing Zubulake and deposition testimony on the nature of the system, the court held that the archived documents would not be unduly burdensome to produce. The court reasoned that “the fact that the company as sophisticated as ADT . . . chooses to continue to utilize the Plasmon System instead of migrating its data to its now functional archival system should not work to the plaintiff’s disadvantage.” As a result, Starbucks was awarded costs and attorney’s fees relating to its motion to compel discovery. Moreover, ADT was ordered to produce the requested data in a reasonably searchable medium. Sterle v. Elizabeth Arden, Inc. 2008 WL 961216 (D. Conn. Apr. 9, 2008). In a wrongful termination action, the plaintiff sought production of seven specific sales performance reports, which the defendant claimed could not be located. The plaintiff then requested an order allowing inspection of the defendant’s computer system, which the court granted, with the proviso that if the seven reports are not located, the plaintiff was to bear the entire cost of the inspection. On the date of the inspection, the defendant restricted the inspector’s access to the computer system and otherwise obstructed the inspection. The plaintiff moved for default judgment. The court denied the motion, but the court ordered the inspection to proceed and the defendant to pay all costs associated with the original motion, the inspector’s frustrated activities, and the subsequent enforcement proceedings. Stone, et al. v. Lockheed Martin Corp., et al., 2009 U.S. Dist. LEXIS 12105 (D. Col. Feb. 2, 2009). The plaintiff in the early stages of this employment action filed an “Emergency Motion to Preserve Evidence” and attached 147 interrogatories. The defendants filed a motion to stay discovery pending a ruling on its motion to dismiss. Copyright © 2009, The Sedona Conference ® 82 www.thesedonaconference.org
Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009 Granting the defendants’ motion, the court found “it is clear that Plaintiff seeks to conduct extensive discovery in this case resulting in undue burden and expense to all parties,” that “the defendant has a likelihood of prevailing on its motion to dismiss,” and that no party would suffer substantial or irreparable harm by a stay pending a ruling on the motion to dismiss. Suarez Corp. Ind. v. Earthwise Techs. Inc. 2008 WL 2811162 (W.D. Wash. July 17, 2008). In a trademark infringement action, the defendant produced 55,000 emails, nine boxes of paper printouts of .pdf files, and 9 CDs of data in native format. The plaintiff objected to the production as an unorganized “data dump” that was neither in organized or labeled to correspond to the categories of the requests, produced as kept in the normal course of business, nor produced in reasonably useable form. The court distinguished between a requesting party’s right, under Rule 34, to request that electronically stored information be produced in a particular form or forms, and a demand by the plaintiff that the information be organized in a particular way. The court ordered the defendant to comply with the production requirements of Rule 34, and recommended that the parties work together to resolve any disputes. Further, the court declined the plaintiff’s request to deem any objections the defendant may have to further discovery waived due to the failure of the defendant to fully respond within Rule 34’s required 30 days, noting that both parties appear to be withholding further production until a confidentiality agreement can be reached and an appropriate protective order entered by the court. SubAir Systems, LLC v. PrecisionAire Systems, Inc., et al., No. 1:06-cv-02620-RBH (D.S.C. Feb. 19, 2009). In this action, plaintiff allowed defendant counsel to inspect its documents on-site and designate documents for copying by a copy service. However, plaintiff refused to produce several of the designated documents to the defendant after copying, claiming that they were privileged. Defendant moved to compel production of these documents, and the court considered whether the plaintiff had waived its privilege claims by failing to exercise reasonable precautions to prevent disclosure of the privileged documents during the inspection and copying process. The court found that although the plaintiff had identified and segregated the privileged documents, it failed to exercise appropriate supervision over defendant counsel in the reading room and failed to object to defendant counsel’s designation of these documents before copying. The plaintiff therefore was held to have effectively waived its claims of privilege regarding these documents. Surplus Source Group, LLC v. Mid America Engine, Inc., 2009 WL 961207 (E.D. Tex. Apr. 8, 2009). This matter arose from the defendants’ alleged failure to share profits from the sale of industrial equipment as required by an agreement between the parties. After the defendants had completed an initial search of relevant financial data, the plaintiffs sought more extensive discovery. To conduct the second search, the defendants asked the plaintiffs for guidance. Approximately six weeks later, the plaintiffs’ attorney responded with a list of deficiencies regarding the first search. The defendants then solicited specific search terms from the plaintiffs. Approximately two weeks later the plaintiffs provided a list of terms for the second search. However, the defendants had already conducted the second search by that time. The plaintiff sought to compel a third Copyright © 2009, The Sedona Conference ® 83 www.thesedonaconference.org
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Federal Court Decisions Involving Electronic Discovery, December 1 ...

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