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eDiscoveryDaily

Scheindlin Reverses Magistrate Judge Ruling, Orders Sanction for Spoliation of Data – eDiscovery Case Law

If you’re hoping to get away with failing to preserve data in eDiscovery, you might want to think again if your case appears in the docket for the Southern District of New York with Judge Shira Scheindlin presiding.

As reported in by Victor Li in Law Technology News, (Scheindlin Not Charmed When Revisiting Spoliation a Third Time), Judge Scheindlin, who issued two of the most famous rulings with regard to eDiscovery sanctions for spoliation of data – Zubulake v. UBS Warburg and Pension Committee of the Montreal Pension Plan v. Banc of America Securities – sanctioned Sekisui America Corp. and Sekisui Medical Co. with an adverse inference jury instruction for deleting emails in its ongoing breach of contract case, as well as an award of “reasonable costs, including attorneys’ fees, associated with bringing this motion”.

Last year, the plaintiffs sued two former executives, including CEO Richard Hart of America Diagnostica, Inc. (ADI), a medical diagnostic products manufacturer acquired by Sekisui in 2009, for breach of contract.  While the plaintiffs informed the defendants in October 2010 that they intended to sue, they did not impose a litigation hold on their own data until May 2012. According to court documents, during the interim, thousands of emails were deleted in order to free up server space, including Richard Hart’s entire email folder and that of another ADI employee (Leigh Ayres).

U.S. Magistrate Judge Frank Maas of the Southern District of New York, while finding that the actions could constitute gross negligence by the plaintiffs, recommended against sanctions because:

  • There was no showing of bad faith, and;
  • The defendants could not prove that the emails would have been beneficial to them, or prove that they were prejudiced by the deletion of the emails.

The defendants appealed.  Judge Scheindlin reversed the ruling by Magistrate Judge Maas, finding that “the destruction of Hart’s and Ayres’ ESI was willful and that prejudice is therefore presumed” and the “Magistrate Judge’s Decision denying the Harts’ motion for sanctions was therefore ‘clearly erroneous.’”

With regard to the defendants proving whether the deleted emails would have been beneficial to them, Judge Scheindlin stated “When evidence is destroyed intentionally, such destruction is sufficient evidence from which to conclude that the missing evidence was unfavorable to that party.  As such, once willfulness is established, no burden is imposed on the innocent party to point to now-destroyed evidence which is no longer available because the other party destroyed it.”

Judge Scheindlin also found fault with the proposed amendment to Rule 37(e) to the Federal Rules of Civil Procedure, which would limit the imposition of eDiscovery sanctions for spoliation to instances where the destruction of evidence caused substantial prejudice and was willful or in bad faith, stating “I do not agree that the burden to prove prejudice from missing evidence lost as a result of willful or intentional misconduct should fall on the innocent party.  Furthermore, imposing sanctions only where evidence is destroyed willfully or in bad faith creates perverse incentives and encourages sloppy behavior.”

As a result, Judge Scheindlin awarded the defendants’ request for an adverse inference jury instruction and also awarded “reasonable costs, including attorneys’ fees, associated with bringing this motion”.  To see the full opinion order (via Law Technology News), click here.

So, what do you think?  Should sanctions have been awarded?   Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

How Big is Your ESI Collection, Really? – eDiscovery Best Practices

When I was at ILTA last week, this topic came up in a discussion with a colleague during the show, so I thought it would be good to revisit here.

After identifying custodians relevant to the case and collecting files from each, you’ve collected roughly 100 gigabytes (GB) of Microsoft Outlook email PST files and loose electronic files from the custodians.  You identify a vendor to process the files to load into a review tool, so that you can perform review and produce the files to opposing counsel.  After processing, the vendor sends you a bill – and they’ve charged you to process over 200 GB!!  Are they trying to overbill you?

Yes and no.

Many of the files in most ESI collections are stored in what are known as “archive” or “container” files.  For example, while Outlook emails can be stored in different file formats, they are typically collected from each custodian and saved in a personal storage (.PST) file format, which is an expanding container file. The scanned size for the PST file is the size of the file on disk.

Did you ever see one of those vacuum bags that you store clothes in and then suck all the air out so that the clothes won’t take as much space?  The PST file is like one of those vacuum bags – it often stores the emails and attachments in a compressed format to save space.  There are other types of archive container files that compress the contents – .ZIP and .RAR files are two examples of compressed container files.  These files are often used to not only to compress files for storage on hard drives, but they are also used to compact or group a set of files when transmitting them, often in email.  With email comprising a major portion of most ESI collections and the popularity of other archive container files for compressing file collections, the expanded size of your collection may be considerably larger than it appears when stored on disk.

When PST, ZIP, RAR or other compressed file formats are processed for loading into a review tool, they are expanded into their normal size.  This expanded size can be 1.5 to 2 times larger than the scanned size (or more).  And, that’s what some vendors will bill processing on – the expanded size.  In those cases, you won’t know what the processing costs will be until the data is expanded since it’s difficult to determine until processing is complete.

It’s important to be prepared for that and know your options when processing that data.  Make sure your vendor selection criteria includes questions about how processing is billed, on the scanned or expanded size.  Some vendors (like the company I work for, CloudNine Discovery), do bill based on the scanned size of the collection for processing, so shop around to make sure you’re getting the best deal from your vendor.

So, what do you think?  Have you ever been surprised by processing costs of your ESI?   Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Permissive Adverse Inference Instruction Upheld on Appeal – eDiscovery Case Law

In Mali v. Federal Insurance Co., Nos. 11-5413-cv, 12-0174-cv (XAP) (2d Cir. June 13, 2013), the Second Circuit explained the distinctions between two types of adverse inference instructions: a sanction for misconduct versus an explanatory instruction that details the jury’s fact-finding abilities. Because the lower court opted to give a permissive adverse inference instruction, which is not a punishment, the court did not err by not requiring the defendant to show that the plaintiffs acted with a culpable state of mind.

After a fire destroyed a barn converted into a residence, the plaintiffs sought to recover $1.3 to $1.5 million from their insurance policy. The insurance company made three payments before becoming skeptical of the plaintiffs’ claim. In particular, the company balked at the plaintiffs’ statement that they had high-end amenities, such as four refrigerators and copper gutters, and their sketch of the barn’s layout, which showed fourteen rooms, a second floor with four rooms and a bathroom, and four skylights. During discovery, the plaintiffs claimed they had no photographs of the barn, but at trial, an appraiser testified that the plaintiffs had shown her photographs of items in the barn and of the barn, which she testified only had one floor, not two as the plaintiffs claimed.

The defendants asked the court to impose an adverse inference instruction on the plaintiffs as a sanction for destroying the photographic evidence. Over the plaintiffs’ objection, the court instructed the jury that it could draw an adverse inference from the plaintiffs’ failure to produce the photographs. The jury agreed with the defendant and found the plaintiffs had submitted fraudulent claims that forfeited their insurance coverage.

On appeal, the plaintiffs argued that the jury’s verdict should be vacated and that a new trial was required because the court did not make findings to justify this sanction. However, the appellate court ruled that the plaintiffs’ argument was “based on a faulty premise” because the trial court “did not impose a sanction on the Plaintiffs.” Therefore, no findings were required. It also found the plaintiffs’ reliance on a prior Second Circuit decision, Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 107 (2d Cir. 2002), where the court ruled that a trial court “must find facts that justify” an adverse inference instruction based on spoliation, inapposite. In Residential Funding, the plaintiff failed to meet its discovery obligations because it did not produce e-mails or backup tapes. The court refused to impose the defendant’s requested sanction, which was an instruction to the jury that it “‘should presume the e-mails . . . which have not been produced, would have disproved [Residential]’s theory of the case,’” because the defendant had not provided facts sufficient to support the sanction.

Here, the Second Circuit explained the distinction between the two types of adverse inferences in these cases: (1) one that punishes “misconduct that occurred outside the presence of the jury during the pretrial discovery proceedings, often consisting of a party’s destruction of, or failure to produce, evidence properly demanded by the opposing party,” and (2) one that “simply explains to the jury, as an example of the reasoning process known in law as circumstantial evidence, that a jury’s finding of certain facts may (but need not) support a further finding that other facts are true.” The court ruled that the latter instruction “is not a punishment” but instead is “an explanation to the jury of its fact-finding powers.”

The Mali court found the trial court’s instructions did not “direct the jury to accept any fact as true” or “instruct the jury to draw any inference against the Plaintiffs.” Because “the court left the jury in full control of all fact finding,” it fell within the explanatory classification of instructions.

So, what do you think?  Was the permissive adverse inference instruction warranted?   Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Thursday’s ILTA Sessions – eDiscovery Trends

As noted the last three days, the International Legal Technology Association (ILTA) annual educational conference of 2013 is happening this week and eDiscoveryDaily is here to report about the latest eDiscovery trends being discussed at the show.  Today is your last chance(!) to check out the show if you’re in the Las Vegas area with a number of sessions available and over 180(!) exhibitors providing information on their products and services.  Here are today’s sessions in the main conference tracks related to litigation support and eDiscovery.

1:30 PM – 2:45 PM:

Discovery Solutions Part 1: The Selection Process

Description: When faced with choosing a new discovery solution, whether internal or outsourced, firms must undertake common tasks and develop goals for the selection process. In part one of this two-part series, hear different perspectives on identifying, researching, evaluating and selecting tools that fit varying workflows and needs. Panelists will discuss their journeys, including development of business requirements, evaluation processes and final installation models.

Speakers are: Mary Pat Poteet – Project Leadership Associates, Inc.; Stephen Dooley – Sullivan & Cromwell LLP; Brett Burney – Burney Consultants; Danny Thankachan – Thompson & Knight, L.L.P.

3:15 PM – 4:30 PM:

Discovery Solutions Part 2: Implementation and Lessons Learned

Description: In part two of this series about discovery solutions, panelists will discuss the implementation of their discovery solutions, including the models/workflows and software their firms selected. You will also hear “lessons learned” analyses of the projects, which will include challenges identified and other considerations that can improve processes and add value to future business or technology projects.

Speakers are: Mary Pat Poteet – Project Leadership Associates, Inc.; Stephen Dooley – Sullivan & Cromwell LLP; Brett Burney – Burney Consultants; Danny Thankachan – Thompson & Knight, L.L.P.

For a complete listing of all sessions at the conference, click here.

So, what do you think?  Have you attended ILTA this year?  If so, how did you like the conference?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Wednesday’s ILTA Sessions – eDiscovery Trends

Usually I write these blog posts early and schedule them to post in the middle of the night.  However, this is Vegas and it is the middle of the night, so I don’t have to schedule the post.  Viva Las Vegas!  🙂

As noted Monday and yesterday, the International Legal Technology Association (ILTA) annual educational conference of 2013 is happening this week and eDiscoveryDaily is here to report about the latest eDiscovery trends being discussed at the show.  There’s still time to check out the show if you’re in the Las Vegas area with a number of sessions available and over 180(!) exhibitors providing information on their products and services.  Here are today’s sessions in the main conference tracks related to litigation support and eDiscovery.

11:00 AM – 12:30 PM:

Hot Topics in E-Discovery

Description: In this open forum discussion, you’ll get to participate in a topic-based dialogue with peers and colleagues on the hottest issues and trends in e-discovery. ILTA members can vote on and influence the list of topics in the weeks leading up to the conference. While loosely moderated, audience participation and questions are encouraged and will drive this session!

Speakers are: David Cowen – The Cowen Group; Steven L. Clark – Lathrop & Gage LLP.

1:30 PM – 2:30 PM:

Technology and Better Project Management

Description: Keeping up with the ever-changing technology around collecting, processing and reviewing data poses a huge challenge to many case teams. The technology is clearly part of the process, but the question remains: Is the process driven by the technology or by principles of project management? Those working to form a litigation support department or those struggling to set up a project plan will get answers here, as we focus on the process of using technology in different ways to develop a straightforward project plan that the case team can use and rely on from case to case.

Speakers are: Cindy MacBean – Watt, Tieder, Hoffar & Fitzgerald; Gordon Moffat – Baker Donelson Bearman Caldwell & Berkowitz; Duane Lites – Jackson Walker L.L.P.; Chad Papenfuss – Kirkland & Ellis LLP.

3:30 PM – 4:30 PM:

A Numbers Game: The Value of E-Discovery Metrics

Description: Einstein once said, “Not everything that counts can be counted, and not everything that can be counted counts.” Come find out which e-discovery metrics really count. Corporate counsel want more certainty surrounding the time and cost of e-discovery, and our panelists will share their experiences implementing e-discovery metrics and lessons learned. Join us as we explore what to measure, how to collect data and what key metrics have added value for clients.

Speakers are: Florinda Baldridge – Norton Rose Fulbright; Browning E. Marean – DLA Piper; Beth Patterson – Allens; William W. Belt – Deloitte.

For a complete listing of all sessions at the conference, click here.

So, what do you think?  Are you planning to attend ILTA this year?  You’re running out of time!  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Tuesday’s ILTA Sessions – eDiscovery Trends

As noted yesterday, the International Legal Technology Association (ILTA) annual educational conference of 2013 is happening this week and eDiscoveryDaily is here to report about the latest eDiscovery trends being discussed at the show.  There’s still time to check out the show if you’re in the Las Vegas area with a number of sessions available and over 280(!) exhibitors providing information on their products and services.  Here are today’s sessions in the main conference tracks related to litigation support and eDiscovery.

8:30 AM – 10:00 AM & 11:00 AM – 12:30 PM (2 part session):

Technology-Assisted Review: A Hands-On Case Study

Description: It’s clear corporations and law firms are increasing their use of computer-assisted review/predictive coding.  That’s why you should join us for a hands-on walk through of computer-assisted review from start to finish, looking at all aspects of the work flow.  We’ll include presentations and exercises that teach attendees about reviewer preparation, training sets, statistical sampling, and validation, making this a can’t-miss session for those who are predictive-coding challenged.

Speakers are: Candi Smith – Winston & Strawn LLP; Andrea Garlanger – Relativity by kCura; Constantine Pappas – Relativity by kCura.

11:00 AM – 12:30 PM:

Predictive Coding Technologies for Information Management Purposes…Could It Be?

Description: Predictive coding is THE buzz word on the streets. This buzz has been focused on new technology capabilities to support e-discovery-related tasks, but we’ll challenge attendees to think outside the box and look at the problems that can be solved by leveraging these technologies for information governance. Attendees will be presented with a different journey through the EDRM model –– this time, starting from the left. Our panelists will present thought-provoking suggestions for innovation, balanced with case studies of firms successfully leveraging these technologies. Take a journey from the practical to the “if I had a magic wand,” and leave with cutting-edge information!

Speakers are: Rudy Moliere – Morgan, Lewis & Bockius, L.L.P.; Bennett Borden – Drinker Biddle & Reath LLP; Kathleen Jimenez – Orrick, Herrington & Sutcliffe LLP.

1:30 PM – 2:30 PM:

E-Discovery Pricing Predictability: An Ongoing Debate

Description: Attend a candid discussion about the world of fixed-fee billing, as it works for some and not for others. Some in the corporate world think there is value in vendor RFP competition, while others believe the improved consistency and aggregation of wholesale purchasing power is more advantageous. A panel of peers will debate the two views. You’ll also hear how to arrive at reasonable pricing assumptions and considerations, when fixed fees are advantageous for everyone involved, and how to negotiate fixed fees.

Speakers are: Eric Lieber – Toyota Motor Sales; Kathryn Goetz – Qualcomm; Jennifer Hamilton – Deere & Company; Gene Eames – Pfizer Inc; Rose Jones – King & Spalding LLP.

3:30 PM – 4:30 PM:

Get Invited to Discovery-Management Meet-and-Confer Meetings with No Regrets

Description: Ming the Merciless once said: “Pathetic earthlings. Hurling your bodies out into the void [of knowledge about meet-and-confers], without the slightest inkling of who or what is out here. If you had known anything about the true nature of the universe [of discovery management issues and dangers], anything at all, you would’ve hidden from it in terror.” Two industry experts with an aggregate of over 50 years of experience will share critical mistakes they witnessed during meet-and-confer meetings: terrified, hurtling bodies – and a mess they had to clean up.

Speakers are: Thomas Morrissey – Purdue Pharma L.P.; J. William Speros – Speros and Associates, LLC.

For a complete listing of all sessions at the conference, click here.

So, what do you think?  Are you planning to attend ILTA this year?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Welcome to ILTA 2013! – eDiscovery Trends

As we previewed on Friday, the International Legal Technology Association (ILTA) annual educational conference of 2013 kicked off yesterday with several networking events, and begins in earnest today with the first day of sessions.  eDiscoveryDaily is here to report about the latest eDiscovery trends being discussed at the show.  Over the next four days, we will provide a description each day of some of the sessions related to eDiscovery to give you a sense of the topics being covered.

If you’re in the Las Vegas area, come check out the show – there are a number of sessions available and over 180(!) exhibitors providing information on their products and services.  As for the conference, there is plenty to talk about as well.  Sessions in the main conference tracks related to litigation support and eDiscovery include:

11:00 AM – 12:00 PM:

If I Were in Your Shoes…Strengthening Partner Relationships

Description: Our panel of litigation support managers from both corporate law departments and law firms will discuss improving working relationships among law firms, their corporate clients and vendors. We’ll take a closer look at the client’s point of view and how firms can deliver superior services. Let’s examine how we can all communicate more effectively and strengthen the relationships between firms and clients.

Speakers are: Scott M. Cohen – Winston & Strawn LLP; Eric Lieber – Toyota Motor Sales; Vanessa Lozzi – Flagstar Bank; Andre Guilbeau – Kiersted Systems.

What Litigation Support Professionals Need To Know About Information Governance

Description: That drive of client-provided ESI you just transferred to the network could contain sensitive information that is a treasure trove for hackers and a huge risk for law firms. What makes firms potentially easy targets, and how can you respond? Litigation support professionals who receive, store, process and transfer data are often the most important line of defense in protecting the client and the firm. Come learn about potential risks, mitigation strategies and how litigation support professionals are partnering with their information governance peers to help mitigate risks.

Speakers are: Rudy Moliere – Morgan, Lewis & Bockius, L.L.P.; William Hamilton – Quarles & Brady LLP; Dera Jardine Nevin – TD Bank.

1:00 PM – 2:00 PM:

eDiscovery Features of Exchange 2013 and SharePoint 2013

Description: Get the inside scoop from Microsoft about how the new eDiscovery Center works to aid in content collection, legal holds, etc. in both Exchange 2013 and SharePoint 2013.

Speaker is: Paul Branson – Microsoft Corporation.

4:00 PM – 5:00 PM:

So You’ve Done a Few Predictive Coding Projects…

Description: Though the newness of technology-assisted review (TAR) is still present, this panel of experts has many projects under its combined belts. This advanced conversation about the use of TAR will demystify for some and provide good insight for all on the practical use of various workflow strategies, the practical development of workflow and protocols, and tips on implementation.

Speakers are: Greg R. Chan – Bingham McCutchen LLP; Brian Evans – Norton Rose Fulbright; Paige Hunt Wojcik – Perkins Coie; Rachel Rubenson – Barclays Bank PLC.

For a complete listing of all sessions at the conference, click here.

So, what do you think?  Are you planning to attend ILTA this year?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

ILTA: A Catalyst to Legal Technology Education – eDiscovery Trends

For over three decades, the International Legal Technology Association has led the way in sharing knowledge and experience for those faced with challenges in their firms and legal departments.  As part of that effort, they conduct an educational conference each year to provide information to legal technology professionals.  That conference (ILTA 2013: The Catalyst) is next week in Las Vegas at Caesars Palace.  Here’s a preview.

As ILTA states in its overview for the conference: A catalyst can be defined as something or someone that causes a reaction or activity between two or more things to create something new.  Via its four-day educational conference with over 200 peer-developed educational sessions, plenty of networking opportunities and more than 200 exhibiting vendors, ILTA is betting (because it’s in Vegas, get it?) that the conference will be a catalyst for its attendees.

I’ve been attending this conference since last century, when it was known as “Lawnet”.  In my experience, it has always been an informative and well attended show.

eDiscovery Daily will be there, reporting from the show to provide information about sessions and general trends observed in those sessions and within the exhibit hall.  There are at least 14 sessions related to eDiscovery and litigation support topics, so there will be plenty to discuss!

If you haven’t registered to attend, but wish to do so, you can register here.

Word of warning: Caesars Palace is not pager friendly, so be prepared to adjust accordingly.  🙂

So, what do you think?  Do you plan to attend ILTA this year?   Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Default Judgment Sanction Upheld on Appeal – eDiscovery Case Law

In Stooksbury v. Ross, Nos. 12-5739/12-6042/12-6230, No. 13a0575n.06 (6th Cir. June 13, 2013), the Sixth Circuit upheld the entry of default judgment as a sanction against defendants that repeatedly failed to comply with discovery obligations, including producing a “document dump” of tens of thousands of pages of nonresponsive information that prejudiced the plaintiffs.

At trial in this RICO action, the court found the defendants engaged in “contumacious conduct” and intentionally delayed discovery. Although the defendants had provided a document “dump” of 40,000 pages of documents in response to document requests, the information was not responsive to the requests, lacked important financial information, was not Bates stamped, and prejudiced the plaintiff. The plaintiffs asked the court to sanction the defendants, and the magistrate judge recommended default judgment in favor of the plaintiff. The judge found that the defendant had a “‘total lack of forthrightness’” in refusing to comply and explain their noncompliance; this conduct “‘amount[ed] to bad faith and a willful decision not to cooperate in discovery.’” The district court subsequently adopted the magistrate judge’s findings but awarded costs and fees instead of a default judgment. The court also afforded the defendants 10 more days to comply with the discovery order, warning them that noncompliance could result in further sanctions.

Despite the additional time and warning, the defendants still failed to provide responsive discovery: “[T]hey included boilerplate objections and failed to provide basic accounting documents or Bates stamp references for the earlier document dump.” As a result, when the plaintiff renewed his motion for a default judgment, the court granted it. The district court relied on four findings: “(1) the defendants intentionally failed to comply with the discovery orders, (2) they failed to heed the court’s warning, (3) the plaintiff suffered prejudice as a result of their noncompliance, and (4) less drastic sanctions would not be effective.” The defendants later objected, but the court refused to reconsider its motion, finding there was no evidence that the defendants’ actions stemmed from excusable neglect.

The defendants appealed this decision. The court reviewed the district court’s four findings for an abuse of discretion. The Sixth Circuit approved the lower court’s decision for the following reasons:

  • First, the defendants met the standard for “willful conduct and bad faith” because they “lacked forthrightness, failed to directly respond to the Court’s inquiries about the discovery matters, offered no explanation for their lack of compliance, and demonstrated ‘bad faith and a willful decision not to cooperate in discovery.’”
  • Second, the plaintiff was prejudiced because the dispute had continued for more than a year, despite judicial intervention and two continuances. Further, the “discovery abuses imposed excessive costs on Plaintiff, who had to sort through the document dump, and undermined Plaintiff’s proof on the issue of liability.”
  • Third, the defendants were fairly warned about the possibility of sanctions, including a default judgment, by the magistrate judge and district court.
  • Fourth, the court first issued a less severe sanction and warned the defendants of the possibility of the default if they did not meet their discovery obligations. Nevertheless, the defendants “forced the district court’s hand in ordering the default judgment.”

Accordingly, the court ruled there was no abuse of discretion.

So, what do you think?  Was the default judgment sanction warranted?   Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

EDRM Wants You! – eDiscovery Trends

A lot is happening in the Electronic Discovery Reference Model (EDRM) group lately and this blog has reported several accomplishments in just the last few months.  With so much going on, you would think they don’t need any help to get things done, but, in fact, EDRM wants your help.

In their latest press release, EDRM has announced its fall campaign for new members. As the press release states, EDRM is offering memberships to individuals and organizations that wish to contribute to the overall improvement of the electronic discovery process by participating in the development and delivery of guidelines, standards, and new resources to the electronic discovery industry.

Since its inception in 2005, EDRM has comprised more than 260 member organizations representing every aspect of eDiscovery and information governance. Attorneys, IT professionals, litigation, and eDiscovery directors and others from corporations, law firms, government, consulting firms, software companies, and service providers are welcome to join EDRM. Members select projects in which to participate based on their individual areas of interest.

The objective of the EDRM Membership Drive is to expand the array of talent and expertise to continue development of practical resources from EDRM by broadening membership from all areas of the electronic discovery industry: providers of software and services, corporations, law firms, educational institutions, and individuals.

Having been a member for most of the 8+ years since EDRM was founded, I can personally say that participating in EDRM is rewarding, not only from a standpoint of helping to shape the direction of the industry, but also in terms of the ability to network with other industry professionals.  It appears that despite the fact that more than half the attendees at this year’s annual meeting were first time attendees, EDRM is still looking for more new members.

Information about EDRM memberships is available here. EDRM will also be hosting a series of webinars in the coming weeks to provide information about the organization and current opportunities for participation to individuals and organizations interested in learning more or considering a new membership.

Since the annual meeting back in May, several EDRM projects (Metrics, Jobs, Data Set and the new Native Files project) have already announced new deliverables and/or requested feedback.  With so much going on and the Mid-Year meeting coming in October (9th through 11th), now is a great time to get involved.

So, what do you think?  Are you a member of EDRM or another organization focused on eDiscovery best practices?   Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.