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For the first time in California, a court has approved the use of preliminary injunctive relief to preserve electronic evidence. On Feb. 5, in Dodge, Warren & Peters Insurance Services, Inc. v. Riley, 03 C.D.O.S. 1171, the Fourth District Court of Appeal affirmed a trial court’s requirement that the defendants submit their electronic records for inspection and copying by a court-appointed expert. The Dodge court focused on some specific aspects of the trial court’s order: � The electronic data would be copied in the defendants’ presence and after working hours so defendants’ business operations aren’t disrupted. � There would be no loss or damage to the information. � The copied material would be unavailable to anyone except upon agreement of the parties or order of the court. (As a result, “concerns over privacy and privilege [would be] minimized to the point of nonexistence.”) Subject to reallocation by the trial court, the plaintiff would bear reasonable costs of the defendants’ review of the copied files for irrelevant and privileged documents. While courts have routinely imposed evidentiary and monetary sanctions on litigants for intentional destruction of electronic evidence (and even negligent failure to preserve electronic documents), Dodge signals that courts may be more proactive in guarding against the spoliation of electronic evidence by granting injunctive relief. Requesting parties may now increasingly seek, and responding parties may correspondingly be forced to defend, applications for preliminary injunctions aimed at preserving electronically stored data. Defendants were employees at Dodge, Warren & Peters Insurance Services Inc., an insurance brokerage firm. They decided to leave and form a new company. Before doing so, they copied documents from Dodge’s electronic files. When Dodge discovered the defendants’ actions, the company terminated their employment and sued them. Claiming that even innocent use of electronic media by the defendants could result in the destruction of potential evidence, Dodge sought a preliminary injunction to “freeze” the defendants’ electronically stored data so it would be available for future discovery. The trial court granted the preliminary injunction, and the defendants appealed. In affirming issuance of the preliminary injunction, the court agreed that the defendants were rendering Dodge’s right to discovery “ineffectual” because they were, “innocently or not, acting in such a way as to violate Dodge’s right to discovery by destroying potentially discoverable evidence.” Injunctive relief was, therefore, appropriate to protect Dodge’s right to discovery and preserve the status quo pending a determination of whether the electronic data was indeed subject to discovery. Defendants raised two arguments, both of which the Fourth District, Division Two, rejected. First, Justice Manuel Ramirez, writing for a unanimous court, rejected the defendants’ argument that regular discovery provided an adequate remedy at law, finding that the defen-dants failed to identify any discovery procedure designed to preserve evidence. Second, the court rejected the notion that the recent abolition of a separate tort cause of action for intentional spoliation of evidence, in Cedars-Sinai Medical Center v. Superior Court, 18 Cal.4th 1 (1998), prevented injunctive relief to preserve evidence. Refusing to construe Cedars-Sinai so narrowly, the court stated: “The [California] Supreme Court did not disapprove of injunctive relief as another nontort alternative. Further, in deciding not to allow a new tort cause of action, the Supreme Court certainly did not suggest that a litigant could do nothing to prevent spoliation from occurring, but could only react after the fact.” Having established that injunctive relief was a suitable mechanism to preserve evidence in appropriate cases, the court turned to the defendants’ claim that Dodge did not make the proper showing — a likelihood of prevailing on the merits and irreparable harm — necessary to obtain an injunction. Since the defendants admittedly copied many of Dodge’s computer files onto discs (along with photocopying “thousands” of documents), the court first found that the defendants’ electronic storage media contained information that Dodge would have a right to discover. Thus, Dodge showed a likelihood of prevailing on the merits. Second, in balancing relative hardships that the parties would suffer, the court found that Dodge could “irretrievably lose evidence that otherwise would have been available to it.” Meanwhile, harm to the defendants would be “negligible.” Based on these circumstances, the court concluded that “it [could not] say that the trial court abused its discretion in determining that Dodge would suffer greater harm should the injunction not be issued than defendants would suffer if it were.” Dodge may have a significant impact on the pursuit and protection of electronic discovery in California. The court implicitly recognizes that litigants may inadvertently overwrite potentially discoverable data by doing little more than turning on their computers, and it holds that an injunction is an appropriate mechanism for preventing such destruction. That analysis suggests that preliminary injunctions may be much easier to get in the future — at obviously great disruption to the responding party. Dodge also throws a new wrinkle into discovery cost allocation issues that requesting parties must consider carefully. Geoff Howard is a partner and Hadi Razzaq is an associate at Bingham McCutchen in San Francisco. They can be reached at [email protected] and [email protected], respectively.

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