Culpability for Allowing Evidence to Become Inaccessible a Factor for Consideration when Determining Good Cause to Compel Production
June 30, 2010
Major Tours, Inc. v. Colorel, 2010 WL 2557250 (D.N.J. June 22, 2010)
Appealing an order from the magistrate judge, plaintiffs argued that defendants should bear the costs of producing inaccessible data where it was defendants’ failure to preserve that resulted in the data’s inaccessibility. The court declined to support such a rule, finding that defendants’ culpability was merely a factor for consideration when deciding whether to compel production for good cause. The court also found that the magistrate judge had adequately considered defendants’ culpability when crafting the underlying order and did not abuse his discretion. Accordingly, the order was affirmed.
Plaintiffs sought to compel production of inaccessible data which had been deleted from defendants’ active servers and was available only on backup tapes. Defendants sought a protective order to avoid production asserting the estimated cost of recovery was $1.5 million. The magistrate judge found that despite a duty to preserve the information at issue, defendants failed to properly issue a formal litigation hold for almost four years. The magistrate judge also found the data was inaccessible and, after conducting the analysis to determine if plaintiffs had nevertheless demonstrated good cause for production, ordered that plaintiffs could request the production of information on specific tapes if willing to bear part or all of the retrieval costs, depending on which tapes were at issue, and that some tapes need not be produced at all. Plaintiffs appealed and argued that “Defendants’ failure to maintain the emails in an accessible format should not provide a basis upon which to avoid having to produce them, because Defendants had an obligation to produce them for litigation.”
Taking up the issue, the court first questioned “whether, as a matter of law, a protective order under Rule 26(b)(2)(B) can ever be granted to a party when the evidence is inaccessible because of that party’s failure to institute a litigation hold” and concluded that “no such bright line rule exists.” Moreover, the court declined to create such a bright line rule, finding instead that defendants’ culpability in failing to preserve the information was merely one factor for consideration when determining whether to compel production. In response to plaintiffs’ assertions that without such a rule "future parties would have a road map to avoiding discovery obligations", the court made clear that it took no position “as to the question of whether a bright line rule exists with respect to a party intentionally permitting relevant evidence to become inaccessible, rather than negligently failing to preserve it.” The court also noted the existence of “penalties available for spoliation wholly apart from whether the Court will order production of backup tapes” and clarified that “the lack of a bright line rule should not be equated with the existence of the opposite rule; it does not mean that any given defendant will avoid the obligation of expensive retrieval of backup information.”
Considering whether the magistrate judge adequately considered defendants’ culpability in the present case, the court found that he did and affirmed his order. Specifically, the court noted the magistrate judge’s findings that in light of the volume of evidence produced by defendants, the backup tapes were “likely to produce evidence of only marginal, cumulative benefit and at great expense” and that “this outweighed the slim likelihood of the discovery of non-cumulative evidence even if there was some unknown degree of negligent spoliation.”
A copy of the full opinion is available here.
Mobile Forensics Training: Investigating Connection Records
June 30, 2010
This month sees the launch of the Forensic Focus Preferred Training program which aims to highlight the very best digital forensics training available. The first course offered is "Mobile Forensics: Investigating Connection Records" delivered in the UK by Sam Raincock of SRC. This is a 2 day course providing in-depth analysis of connection records and a comprehensive overview of cell site analysis techniques. A 10% discount is available for a limited period. Further details at http://www.forensicfocus.com/src-training
Windows Search forensics
June 30, 2010
by Joachim Metz "While some may curse Windows Vista for all its changes, for us forensic investigators it also introduced new interesting 'features'. One is the integration of Windows (Desktop) Search into the operating system. Most corporations have been reluctant to adopt Vista, however more and more Windows XP systems are being replaced by Windows 7 equivalents. Windows 7 also contains Windows Search and enables it by default. It actually can be challenging to disable it so one can conclude that Windows Search is becoming a relevant source of information in forensic analysis of Windows systems..." Read more
EDRM Model Code of Conduct: Moving eDiscovery Out of the Wild, Wild West
June 29, 2010
| Jul |
| 9 |
| 12:00 pm |
When it comes to acceptable boundaries of ethical business practices within the eDiscovery service industry, are we still in the time of spurs, six guns and saddles?
Join us at high noon as industry experts discuss developing Model Code of Conduct guidelines and their relevance to both companies and legal technology providers.
Topics addressed will include:
- The current “lawless” state of today’s eDiscovery practice
- How the Electronic Discovery Reference Model (EDRM) Model Code of Conduct Project is seeking to tame the wild, wild west
- Ideal best practices for the supervision of attorneys, non-attorneys and clients
- Considerations for establishing effective working agreements based on ethical business practices
- How to ethically manage information from records retention to metadata
Moderators:
- George Socha, President of Socha Consulting LLC and co-founder of the Electronic Discovery Reference Model (EDRM) project
- Tom Gelbmann, Managing Director of Gelbmann & Associates LLC and co-founder of the Electronic Discovery Reference Model (EDRM) project
Panelists:
- Julie Grantham, General Counsel of Scarab Consulting and Adjunct Professor at the University of Texas School of Law
- Eric P. Mandel, Director of E-Discovery at Zelle Hofmann Voelbel & Mason LLP
Scarab Unites with the Founders of the Electronic Discovery Reference Model for July 9 Webinar
June 29, 2010
Press release: Webinar to Explore the Boundaries of Ethical Business Practices for eDiscovery
» Register here: https://www2.gotomeeting.com/register/470133842
HOUSTON – June XX, 2010 – When it comes to acceptable boundaries of ethical business practices within the e-discovery service industry, are we still in the time of spurs, six guns and saddles?
Scarab Consulting, a premier provider of litigation support and electronic discovery services for law firms and corporations, announced today that it has united with the founders of the Electronic Discovery Reference Model for a July 9th webinar titled, “EDRM Model Code of Conduct: Moving E-Discovery Out of the Wild, Wild West.”
The complimentary webinar will combine some of the industry’s leading experts to discuss ethical decision-making struggles faced by both companies and their service providers during the eDiscovery process. Topics addressed will include the current “lawless” state of today’s e-discovery practice, how the EDRM Model Code of Conduct Project is seeking to establish baseline laws to tame the wild west and considerations for establishing effective working agreements based on ethical business practices. Register for the webinar at www.consultscarab.com.
Moderators for the webinar include:
- George Socha, Esq. – As litigator for 16 years and President of Socha Consulting LLC, George co-founded the Electronic Discovery Reference Model.
- Tom Gelbmann – A managing director of consulting practice Gelbmann & Associates LLC, Tom co-founded the Electronic Discovery Reference Model project in 2005.
Panelists include:
- Julie Grantham, Esq. – Julie is General Counsel for Scarab Consulting and an Adjunct Professor at the University of Texas School of Law. Her course on e-discovery is one of the first on the subject to be developed and taught at a university.
- Eric P. Mandel, Esq. – As Director of E-Discovery for Zelle Hofmann Voelbel & Mason LLP, Eric is a subject matter expert in electronic discovery and litigation readiness planning and serves as co-chair and principal author of the EDRM’s Model Code of Conduct project.
One hour CLE credit is pending in New York and Texas, including ethics.
For more information on the webinar and its takeaways or to view full bios for the presenters, visit www.consultscarab.com.
About Scarab Consulting
Scarab Consulting provides technology-driven solutions for litigation and electronic discovery. The company has offices nationwide to serve its robust client list which includes Am Law 200 law firms and Fortune 1000 companies. Scarab has established a strong reputation for its technical agility, client-centric approach and ability to reduce litigation and corporate compliance costs. For more information, visit www.consultscarab.com.
Contact:
Melanie Brenneman
Edge Legal Marketing
P: 713-294-7857
E-mail: mbrenneman@edgelegalmarketing.com
Computer Forensics – sometimes it’s all about timing
June 29, 2010
by Sam Raincock "When a crime happens, the time of the events may be critical to the legal case. However, how are these times established? Is it the time alleged by the witness? When the CCTV system captured the image? When the computer said the person left their home? When the satellite navigation system recorded they arrived? When the mobile was cell sited in the area? Or is it all of the above?" Read more
Tencent QQ 2009/2010 history format recovered
June 29, 2010
Computer forensics software vendor Belkasoft announced today that it has recovered the new QQ messenger history format. Tencent QQ is the most popular Instant Messenger globally with user base about 1 billion of people and is very widely used in China...
Radio Tactics Opens Asia Pacific Office
June 29, 2010
Radio Tactics Ltd, a provider of mobile phone forensics equipment, has announced the official opening of its Australian Office, complementing its existing presence in the UK and USA. The opening of the new office constitutes the next step in an aggressive international expansion strategy...
Jury Instruction Allowing Inference that Destroyed Evidence Was Unfavorable and Payment of Attorneys’ Fees and Costs Ordered as Sanction for Failure to Preserve
June 28, 2010
Medcorp, Inc. v. Pinpoint Tech., Inc., 2010 WL 2500301 (D. Colo. June 15, 2010)
Finding “willful” spoliation of 43 hard drives “in the sense that Plaintiff was aware of its responsibilities to preserve relevant evidence and failed to take necessary steps to do so”, a special master ordered a jury instruction which allowed the jury to infer that the destroyed evidence was unfavorable to plaintiff and for the parties to split the cost of defendants’ litigation of the spoliation issue. Upon a motion to modify the order, the magistrate judge affirmed the imposition of the jury instruction, but found plaintiff should pay all of defendants’ reasonable expenses and ordered payment of $89,365.88.
A special master found that plaintiff’s destruction of 43 relevant hard drives was “willful, in the sense that Plaintiff did not do enough to preserve the hard drives”, but acknowledged that ‘Defendants have not established … that [Plaintiff] has … violated any discovery order … and there is no substantial evidence that its destruction of hard drives or the recycling of its work-stations was anything other than what [Plaintiff] would do in the ordinary course of business.” Accordingly, the special master ordered a jury instruction entitling the jury to infer that the destroyed hard drives would have contained unfavorable evidence and for the parties to split defendants’ costs for litigating the issue. Defendants moved to modify the order, arguing the sanctions imposed did not cure the prejudice caused by plaintiff and seeking terminating sanctions or the admission of certain facts. Noting the defendants’ lack of objection to the special master’s factual findings, the court limited its de novo review to whether the facts justified harsher penalties, as argued by defendants.
Beginning her analysis, the magistrate judge noted agreement with the standard set forth in Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., LLC, 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010) for determining the type of sanctions justified for spoliation, namely that “’[t]he determination of an appropriate sanction, if any, is confined to the sound discretion of the trial judge and is assessed on a case-by-case basis” and that “appropriate sanctions should ‘(1) deter the parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore “the prejudiced party to the same position [it] would have been in absent the wrongful destruction of evidence by the opposing party.” The court also highlighted the “well accepted” premise that “a court should always impose the least harsh sanction that can provide an adequate remedy.”
Regarding defendants’ specific request for dismissal, the court undertook its analysis pursuant to the factors set for in Ehrenhaus v. Reynolds, 965 F.2d 916 (10th Cir.1992): “(1) the degree of actual prejudice to the defendant; (2) the amount of interference with the judicial process; ... (3) the culpability of the litigant; (4) whether the court warned the party in advance that dismissal of the action would be a likely sanction for noncompliance; and (5) the efficacy of lesser sanctions.” Addressing each factor in turn, the court determined that dismissal was not appropriate. Specifically regarding the culpability of the plaintiff, the court made clear that while it did not condone plaintiff’s ineffective efforts, it could not conclude that “the destruction of hard drives in the ordinary course of business was done with a sufficiently culpable state of mind to warrant a terminating sanction.”
As to the last factor, the court’s analysis affirmed the sufficiency of the special master’s sanction noting the lack of evidence that plaintiff’s destruction was “anything other than inadvertent in the sense that nothing on the record indicates that Plaintiff set out to intentionally destroy evidence relevant to the parties’ claims” and that plaintiff was able to provide “substitute information” that, “while not replicating the lost evidence, may be sufficient to replace it.”
Next, finding that plaintiff’s conduct was “negligent rather than intentional” and that the jury instruction adequately addressed defendants’ concerns, the magistrate judge denied defendants’ request to have facts admitted into evidence “indicating that Plaintiff’s spoliation was intentional and knowing”.
Finally, regarding the special master’s determination that fees should be split, the magistrate judge disagreed. Instead, the magistrate judge made clear that the payment of reasonable fees was warranted, and rejected the amount arrived at by defendants: $130,276.13. Instead, the court awarded the sum of $89,395.88. The court’s reduction of fees and costs took into account that “too much time was spent by counsel on the matter”, that “Defendants did not receive all of the relief they were seeking”, and that “the wrong has been at least partially remedied by other means.”
A copy of the full opinion is available here.
Case in Point 2010-06-28 05:00:35
June 28, 2010
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