Leonard Deutchman ()
Attorneys for whom I consult will often ask me what the best way is to learn how to request e-discovery. I usually joke, “Other than taking one of my CLEs?” and then tell them that the best way to learn what to ask for in e-discovery is to have to produce it.
When you have to take ownership of the process—(1) understand the legal issues involved; (2) identify all people with any involvement in the matter; (3) identify all of the locations (hard drive on their computers, email and file servers, external media, Web-based email, cloud repositories) where these people stored potentially responsive files; (4) make sure that all of the electronically stored information in all of these sources has been collected, processed and reviewed (file-by-file, searching first using keywords and date delimitations, technology-assisted review); (5) produce all responsive, nonprivileged files—you learn what to ask for from opposing counsel, how best to ask and how you will know whether you are getting everything you’ve requested.
Some recent cases, in which defendants have prevailed in spoliation motions made against plaintiffs, illustrate my point. At CLEs and in articles such as this, we talk of the “requesting” and “producing” parties, but those terms are often used to describe “plaintiff” and “defendant” neutrally since, typically, plaintiffs request discovery and defendants produce it.
It is both interesting and unsurprising that the spoliation motion, usually the weapon (used or threatened to be used) of the plaintiffs bar, has been turned against it by the litigation defense bar as the latter, now long-schooled in defending against spoliation motions, has grown to appreciate their value and learn how to make them effectively.
Recent Case Law
Spoliation motions by the defense are not new. In Pension Committee v. Banc of America Securities, 685 F.Supp. 2d. 456 (S.D.N.Y. 2010), U.S. District Judge Shira Scheindlin of the Southern District of New York, of Zubulake fame, sanctioned the plaintiffs for not issuing a timely, written litigation hold. It appears, however, that they are becoming more frequent.
In Procaps v. Patheon, No. 12-24356-Civ-Goodman (S.D. Fla., Feb. 28, 2014), the plaintiff claimed more than $350 million in damages for antitrust violations. Although the claim was filed in December 2012, the plaintiff did not implement a formal litigation hold until the court ordered it to do so in February of this year, did not meet with its IT team and other executives to determine what the sources of responsive ESI were and where they were located, and did not retain an e-discovery consultant to help implement a litigation hold or search for relevant ESI and documents. Some personnel apparently self-collected what they deemed to be responsive files.
The defendant claimed spoliation. In its defense, the plaintiff argued that the defendant had not showed that its failure to issue a litigation hold resulted in the loss of any ESI. The court found for the defendant. It ordered the plaintiff to engage an e-discovery vendor to interview the plaintiff’s head of IT to map the plaintiff’s IT architecture, perform forensic collections of the electronic files of 18 of the plaintiff’s employees, attempt to recover deleted files, and collect all of their paper documents.
The vendor was to collect from all repositories of ESI. As additional custodians were identified, their electronic and paper files, as well, would have to be collected. The plaintiff was then ordered to process the data, search it using terms agreed to by both parties, review it and produce all responsive, nonprivileged files.
The court further ordered the plaintiff to pay the defendant’s attorney fees of $24,115 for litigating the spoliation motion. It further ordered that this payment was to be shared equally by the plaintiff and its counsel. The court reasoned that counsel had failed its client by not overseeing the implementation of a timely litigation hold and not properly supervising its client in locating and collecting ESI and paper documents.
In Hosch v. BAE Systems Information Solutions, No. 1:13-cv-00825-AJT-TCB (E.D. VA Jan. 22, 2014), the defendant moved, before the magistrate, to allow four additional hours for the plaintiff’s deposition, to compel additional depositions and for sanctions. The defendant further moved, on the grounds of numerous discovery violations, for dismissal of the plaintiff’s complaint, with prejudice, as well as for attorney fees and costs, including the cost of forensic examination of the plaintiff’s electronic devices.
In the underlying suit, the plaintiff claimed that the defendant had harassed and then fired him as retaliation for the plaintiff’s having exposed the “defendant’s alleged fraudulent billing practices in violation of the False Claims Act.” The defendant moved for forensic inspection of the plaintiff’s electronic devices, claiming that the “plaintiff admitted that he … deleted and destroyed information relating to his claims.” The court granted the motion. The defendant then filed its sanctions motion, claiming that the plaintiff refused to comply with the court’s order and “intentionally destroyed and deleted evidence.”
The court found “an extensive and disconcerting list of plaintiff’s discovery transgressions,” which included “refusing to submit” numerous “electronic devices and accounts for forensic inspection,” failing to comply with the court’s order to produce responsive documents, withholding files exposing “possible bias of plaintiff’s witnesses,” which “were only uncovered after the forensic inspection,” removing “numerous documents and data from defendant’s databases,” and destroying “thousands of potentially relevant documents.”
Forensic evidence led the court to its findings. As the court characterized it, “extensive spoliation continued unabated throughout discovery in this case.” As an example, the court noted that the “plaintiff completely wiped the contents of his iPhone … just two days before [he] turned the device over to counsel and on the same day that the court warned plaintiff that failure to comply with the court’s order may result in sanctions.” He “similarly deleted two years’ worth of information from his Blackberry device before producing it to defendant.”
To provide remedies for the plaintiff’s spoliation, the court recommended dismissal of the plaintiff’s complaint with prejudice. It also ordered the plaintiff to pay the defendant’s attorney fees and costs associated with pursuing its motions, including the costs of forensic inspection.
In In re Domestic Drywall Antitrust Litigation, MDL NO. 2437, 13-MD-2437 (E.D. Pa., May 12, 2013), the defendants filed a motion to compel the plaintiffs to provide facts supporting their complaint, which the court noted was “a frequent issue in antitrust litigation.” Because of plaintiffs “counsel’s felicitous access to electronically stored information,” the court granted the motion, and further ordered that the defendants “reciprocate.”
In support of its decision, the court reasoned that “ignoring the capabilities which ESI allows the parties to search for and produce factual information in a case of this nature is like pretending businesses still communicate by smoke signals.”
Reviewing prior decisions ruling contrary to its holding, the court noted that they “were mostly decided before the proliferation of computer programs which enable counsel to search a large collection of documents for specific facts, without significant burden. Although there is a significant expense factor in collecting the documents and having them appropriately entered into an electronic form, once that expense has been undertaken, which is a normal expense in complex litigation, the actual searching for documents for specific facts is not expensive.”
The court further reasoned that “rulings on discovery in 2014 must recognize we live in a world of ESI, which supports the court’s requirement that counsel submit pretrial factual statements as part of discovery, in part because doing so is not burdensome.” Despite the generalized claim that e-discovery is “overly expensive and unproductive,” in some cases, such as the instant one, “its benefits vastly outweigh its costs.”
The court noted that the issues in the instant matter were “important,” the “financial stakes of both discovery and damages” were “high,” and there were “important reasons of public policy justifying broad discovery in antitrust cases, regardless of the result.” Moreover, in matters such as the instant one, with “1,100 search terms and the millions of documents” to be reviewed, e-discovery was beneficial to the matter, as vendors could provide sophisticated tools for searching through and producing responsive files quickly. The court noted with approval the “landmark opinion describing and allowing” predictive coding in Da Silva Moore v. Publicis Groupe, 287 F.R.D. 182, 184 n.2 (S.D.N.Y. 2012).
It would be hyperbole to state that the plaintiffs bar has been so fixated on demanding e-discovery that it has not learned how to preserve, review and produce it, but as with any hyperbole, there is a core of truth to the statement. In a relatively small set of civil matters, plaintiffs have large and obvious discovery burdens, but in many, if not most, civil matters, the plaintiff has very little e-discovery to produce, and so counsel has little to learn from producing that non-existent or small set of files.
On the other hand, as the cases discussed above illustrate, the obligation to produce e-discovery that, over the past 15 years or so, has grown so as to be imposed upon almost all civil defense counsel, has educated the civil defense bar simultaneously in how to request as well as produce e-discovery. As the discussed cases make clear, that education has its benefits.
Leonard Deutchman is vice president and general counsel of LDiscovery LLC, a firm with offices in New York City, Fort Washington, Pa., McLean, Va., Chicago, Atlanta, San Francisco and London that specializes in electronic digital discovery and digital forensics.