Monthly Archives: June 2019

Deleted ESI Doesn’t Automatically Mean Sanctions: Two Recent Cases Highlight the Spoliation Thresholds in Rule 37(e)  

With the 2015 FRCP amendments quickly nearing a half-decade in existence, case-law continues to define how these rules are upheld in court, especially when it comes to the handing out of sanctions. Two recent cases show how strictly judges are adhering to the thresholds laid out in Rule 37(e). As a reminder, here they are those thresholds in plain language: 

If Electronically Stored Information (ESI) was lost because a party didn’t take reasonable steps to preserve it when they should have (i.e. because they knew litigation was imminent); and if the lost ESI can’t be restored or replaced by simply doing discovery again; and if there was an intent to deprive the party of information by the loss of the ESI; and if the lost ESI actually affects the outcome of the case, then the court may consider sanctions. 

In other words, sanctions are not given just for spoliation of ESI.  

 

Mafille v. Kaiser-Francis Oil Co. May 21, 2019 (N.D. Okla. 2019) 

 “Lecturing Plaintiffs about their obligation to preserve electronically stored evidence is exceedingly poor form. 

In this case, the Plaintiff, Marlana Mafille, was terminated in part because of alleged performance issues. As part of a standard retention policy, Ms. Mafille’s company computer was given to a charitable organization with other retired computers and the data was presumably destroyed, even though the plaintiff had submitted an EEOC charge of discrimination three months earlier. 

After the defendant tried to blame the plaintiff for not requesting the computer be saved, US Magistrate Judge Frank H. McCarthy stated in his ruling, “…lecturing Plaintiffs about their obligation to preserve electronically stored evidence…is exceedingly poor form and beyond zealous advocacy.” He continues, “The court finds that Mrs. Mafille’s work computer should have been preserved and further that Defendant is solely and entirely at fault for failing to take reasonable steps to preserve the computer. However, that finding does not necessarily equate to an award of the sanctions Plaintiffs have requested.” 

Why were sanctions denied? The plaintiff’s computer contents were uploaded daily onto the defendant’s LAN server as part of a company policy. So even if her computer were destroyed, the contents could potentially be retrieved if discovery were done on the LAN server. Also, the defendant requested which documents were vital for the plaintiff’s case so they could attempt to retrieve them from the LAN server, but the Plaintiffs never identified any such items. Or as Judge McCarthy ruled, In the absence of such a showing the court must find that Plaintiffs have not suffered any prejudice as a result of the destruction of Mrs. Mafille’s work computer.” 

 

Univ. Accounting Serv., LLC v. Schulton. June 7, 2019 (D. Or. 2019) 

I deleted the file as fast as I could, because it’s exactly the type of damning information they want to catch me with.” 

Ethan Schulton was a lead software developer for ScholarChip and decided to leave the company and start his own endeavor to compete directly with his former employer. He also took his entire email file, ScholarChip’s client list, and some client webinars. Litigation began on March 7, 2018 and four days later, Schulton started deleting files. He did so again on April 9. And then again in August. During his deposition, Schulton admitted, “I recognize fully that was in violation of the subpoena,” and later said of one particular piece of data, “I deleted the file as fast as I could, because I was petrified at its existence, because it’s exactly the type of damning information that UAS wants to catch me with.” 

In US District Judge Michael H. Simon’s Ruling, he states that the Rule 37(e) sanction thresholds “have been satisfied.” It was clear that ESI which should have been preserved was deleted after litigation had begunJudge Simon continued, Schulton has admitted facts sufficient to support the conclusion that he acted with the intent to deprive UAS of the information’s use in the litigation, at least to the extent of depriving UAS of the ability to prove precisely what Schulton took with him when he left ScholarChip’s employment at the end of 2017. Finally, UAS has attempted to restore or replace through additional discovery the deleted information but has been unsuccessful. Thus, UAS has satisfied the four threshold elements under Rule 37(e). 

Yet, even after meeting the threshold conditions, the judge didn’t order case termination sanctions, but instead chose a permissive inference spoliation instruction against the defendant. 

 

Conclusion: 

Just because spoliation sanctions require proof that the stringent Rule 37 thresholds were met, doesn’t mean you should be lax when it comes to your eDiscovery processes or technology. Stay up to date with the latest eDiscovery and industry news here on the Ipro blog. 

 

Written by:
Jim Gill
Content Writer for Ipro Tech

  

eDiscovery Technology for Small Law Firms? The Answer Isn’t Necessarily Found in the Cloud

If you look at the news or even the endless supply of police procedurals and legal dramas streaming on Netflix and Hulu, you would think that everyone is aware that evidence these days is often electronic. But according to a recent Thomson Reuters survey, only 19% of smaller law firms are investing in eDiscovery technology and only 2% plan to do so in the next year (Who else gets an image of paralegals printing out emails and reviewing stacks of paper documents that were created digitally?). 

Most small firms are probably working off the assumption that eDiscovery software solutions are cost-prohibitive and only a worthwhile investment for larger firms or in-house corporate legal departments. But times have changed, especially with a move to cloud-based platforms. But what if you don’t want to move to the cloud? You may want the control and security that comes from having your operations on-prem. Or you may be a small shop that wants to keep things simple and keep costs lower than even the cheapest cloud-based offerings. You may even want to run the entire discovery process straight through review into trial preparation and presentation software on the same machine. 

Many desktop-based eDiscovery options are legacy platforms. They may still be available for use, but they aren’t being supported in the present or developed for the future. And in today’s dynamic technology world, simply having functional software isn’t a longterm solution.  

And this is where small firms find themselves stuck: either they adopt cloud-based solutions that were built with larger users in mind or they are left with outdated, unsupported desktop solutions. It’s no wonder many of them simply stick with the old way of doing things. 

But instead of a “go cloud or do nothing” approach, the small firm solution might be a powerful, locally deployed, low-overhead eDiscovery suite. A tool that can quickly ingest, scan, and OCR an array of file-types directly into review. Software that has the most up-to-date review tools of a cloud-based platform. And then, when production is finished, the same machine can move data seamlessly into trial presentation software on a laptop for use in trial. Ia case comes along that is too large for a firm’s physical infrastructure or needs to be accessed online by co-counsel, it can simply be moved to the cloud, allowing small firms to take on cases of any size or complexity without significant ramp-up time or monetary investment. 

Imagine it – a small law firm with high-end eDiscovery capabilities deployed locally. Unicorn? Game-changer? Or the answer that’s been hiding in plain sight all along. 

Learn more about the most comprehensive desktop-based eDiscovery solution on the market. 

 

Proposed German Regulation Raises the eDiscovery Existential Question:

 What is Legal Tech?

A new article published in Artificial Lawyer discusses a proposed new regulation for legal technology solutions “that have encroached on what they see as the regulated provision of legal services.” While still far away from fruition, if it were to pass, this regulation (or others like it) could affect the EU in significant ways.

The regulation specifically targets automated platforms that guide people through a legal claim process. There has been a rise in legal technology which, as the article states, “build[s] up their legal expertise through scaled case numbers, allowing them to go up against big opponents. They assume the user’s cost, give the user someone to fight for them, in exchange for a part of their winnings upon success. Moreover, they may receive financing from third parties. Lawyers [in Germany] are currently not permitted to do either.” This approach gives users access to legal areas where attorneys have little interest due to the small amounts in dispute.

But what does a proposed regulation in Germany have to do with eDiscovery in North America? If anything, it raises that question which haunts all of us in one way or another: who am I? Or in this case, what is legal tech? You might ask, why bother with philosophy 101 when there are terabytes of data to review? Too often in the legal world there’s a “we’ll deal with that when it comes up” approach. Our cases rarely go to trial. We usually don’t deal with large-scale data. Almost all of our discovery is email. And then, when something new does come up, we are caught off guard.

Potential outcomes are always worth pondering, specifically for the reason that it causes us to stop and imagine what is possible. So, how would you define legal tech?

The German politicians’ definition, “seems to mean web-based platforms that engage with consumer legal issues.” This certainly seems to potentially encompass many (if not all) of the eDiscovery software companies out there. The German proposal currently focuses on individuals who use automated legal platforms, but where does the regulation end? Does this extend to scholars, consultants, service providers, in-house corporate eDiscovery team members who aren’t attorneys? As Artificial Lawyer posts, “Would AI review tools administered by a team of paralegals in an LPO come under the ‘unregulated legal tech advice’ umbrella?”

Again, all of this is speculation. After all, it’s a proposed regulation in a single European country that may not gain any traction. Then again, understanding begins with definition. In an industry like eDiscovery—where our own terms aren’t clearly defined (just ask for a definition of AI or TAR or ECA, and you will get a variety of answers)—the basic question of “what is legal tech and what is its role in the legal system?” is definitely worth pondering and potentially preparing for.

Attorneys Need Presentation Tools Specifically Designed for Trial

Because the Courtroom isn’t the Classroom—

Historically, teachers have used a variety of technology display tools for presenting information to their students; a photocopy on transparency paper via an overhead projector or a video camera hooked up to a TV on a rolling cart to show clear images from a book. Fast forward a few more years when smart podiums came along, giving teachers the ability to connect a laptop to a projector and show images, word docs, and videos. These were all powerful in their day.

Often, the presentation needs of teachers and attorneys have a lot of similarities, gaining the right focus of your audience, but attorneys have much more at stake; they need a dynamic presentation tool to meet their needs in the courtroom. Yet many still use PowerPoint, document cameras, and even foam boards to present evidence to the jury. 

The law firm Salvi, Schostok & Pritchard were doing just that 4 years ago, when they realized they needed far more control and flexibility over their presentations. That’s when they switched to TrialDirector as their go-to presentation software for trial. The firm attributes TrialDirector’s seamless flow, the ability to call up exhibits on the fly, video deposition tools, and how easily the presentation integrates with the attorney’s dialogue as having a powerful impact on the jury to help them tell their story and provide a positive outcome for their clients. 

With TrialDirector 360 you can: 

  • Present virtually any type of document or media from your PC or laptop 
  • Streamline your entire trial preparation and presentation process with one tool 
  • Organize transcripts, video depo’s, and documents for offline presentation 
  • Impress juries and clients through easy-to-present, impactful multimedia presentations 
  • Easily collaborate with multiple users working on a centrally stored case 

Most of the time we stick with what we know and make it work, often not realizing there may be a better solution out there. Trial presentation is no different, attorneys need a competitive edge in the courtroom and TrialDirector 360 can give them that edge.