Tag Archives: FRCP

Is eDiscovery Existing in a Post-Sanctions World?

eDiscovery Sanctions

Is eDiscovery Existing in a Post-Sanctions World?

The short (and obvious) answer is no. Rule 37(e) isn’t going anywhere. But recent case law indicates a trend where sanctions seem to be harder to come by, which may play into what concerns in-house legal teams as they consider the technologies they may need.

A recent infographic, General Counsel: From Lawyers to Strategic Partners (released by Raconteur with data from Walters Kluwer) showed 66% of corporate legal teams saying “Data Breaches and Protection of corporate data” was a top issue keeping them up at night. Sanctions didn’t even make the list.

Recent case law from 2019 supports the lack of sanction fear, as several cases showed that even when evidence was deleted (sometimes knowingly), courts aren’t doling out sanctions in the same way since the 2015 amendments to the Federal Rules of Civil Procedure (FRCP) went into effect.

As a refresher, Rule 37(e) of the FRCP lays out the threshold for sanctions as follows:

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.

The following examples show that consider is a key word, even when they find the threshold has been met, as in case 3.

United States et al. v. Supervalu, Inc. et al. Nov. 18, 2019 (C.D. Ill. 2019)

Three days after a subpoena, a district pharmacy manager for the defendant sent out an email stating, “Throw away all your competitor’s price matching lists and get rid of all signs that say we match prices.”

The plaintiff alleges there are inconsistencies in both the number and timing of the subsequent litigation holds and accordingly asked the Court for an in-camera review of the three litigation holds which were eventually sent. The plaintiff also believes that the defendant failed to preserve price matching materials responsive to the government subpoena from approximately 80% of their pharmacies nationwide.

But the Court denied sanctions, stating, “Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.”

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

In this case, the plaintiff’s computer was wiped after her termination as part of standard retention policy. When the plaintiff filed for spoliation sanctions, the Court found that 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 plaintiff never identified any such items.

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

In this case, the defendant 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.” 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.

No Sanctions, Why Worry?

Without the specter of sanctions haunting the dreams of in-house legal, does this mean they’ll finally get a good night’s sleep?

Only if they have the processes and technology to manage the exponential growth of data sizes and new file types, which continues to be one of the biggest challenges for corporations, particularly for in-house legal teams who are tasked with mitigating risk involved with enterprise data. To do this, the ability to manage data in a flexible and scalable manner is vital.

Sending a legal hold notice is pretty straightforward. Gaining meaningful and speedy insight into petabytes of data from multiple file types for investigations and subpoenas is much more complex, and forward-looking legal teams are putting their technology to work doing just that.

 

Written by Jim Gill
Content Writer, Ipro

A first step in this process is to use Ipro’s Pre-Litigation Data Checklist as a guide to effectively manage enterprise data in order to avoid potential data pitfalls in the middle of a matter.

Download the Ipro Pre-Litigation Data Inventory Checklist

Ipro Pre-Litigation Data Checklist

Download Ipro’s FRCP Cheat Sheet to brush up on your eDiscovery Rules!

FRCP eDiscovery Rules

Download Ipro’s FRCP Cheat Sheet to brush up on your eDiscovery Rules!

The Federal Rules of Civil Procedure (FRCP) are just that: rules established by the Supreme Court and approved by Congress, specifying procedures for civil legal suits within US federal courts. There are several of these that apply specifically to eDiscovery and understanding their role in the process is vital for any practitioner, whether you’re on a corporate legal team, part of a law-firm, or a specialist at a service provider.

Don’t want to read pages and pages of legalese just to learn the Federal Rules of Civil Procedure (FRCP) that apply to eDiscovery? We’ve got you covered!

Ipro FRCP Cheat SheetNeed to brush up on your Federal Rules of Civil Procedure as they apply to eDiscovery?

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Should Mobile Devices be Imaged for eDiscovery? Recent Case Law Provides Insight

Mobile Devices Imaged for eDiscovery

Should Mobile Devices be Imaged for eDiscovery? Recent Case Law Provides Insight

Deciding whether mobile devices should be imaged can be difficult when it comes to eDiscovery. They contain a large variety of file-types and data intermingled with a lot of private information, which may be privileged. Extracting specific information can be difficult and imaging an entire device can be costly. So the question remains: To image or not to image? But not really. That’s why we have case law.

On the surface, it seems that imaging an entire device would fall beyond the usual scope of a matter as it’s defined under FRCP Rule 26. Specific relevant data would be the obvious choice over everything on a single device. Which is exactly how a magistrate judge saw it last year in Henson v. Turn (N.D. Cal. Oct. 22, 2018), when the court denied requests by the defendants to inspect personal devices of the plaintiffs, collecting web browsing history and cookies in the process, on the basis that the data sought was neither relevant nor proportional to the needs of the case.

But in a recent ruling by Special Discovery Master Hon. Rebecca Westerfield (Ret.) in the class action suit In re: Apple Inc. Device Performance Litigation (N.D. Cal. Aug. 22, 2019), the court determined that imaging a sample set of the plaintiffs’ mobile devices was proportional to the needs of the case under Rule 26. So what sets this case apart from Henson v. Turn?

The Case:

In re: Apple concerns the plaintiffs’ claim that Apple used operating system updates to “throttle” and hamper device performance regarding certain of its iPhone 6 devices, allegedly impairing “the integrity, condition, quality, and usefulness of the Devices without Plaintiffs’ knowledge or consent.”

Each side brought forward forensic experts. The plaintiffs’ expert, Mary Frantz, Managing Partner of Enterprise Knowledge Partners, LLC, asserts that “Apple’s internal databases such as collected historical diagnostics, support, and potentially archived cloud of backup files would be a preferred and sufficient method to determine historical performance,” and that, “there is no difference between what would be found on any specific Devices and what could be found via iTunes and iCloud analysis (which Apple could test without a forensic inspection).”

Apple’s expert, Paul D. Martin, PhD, Computer Science—who has over a decade of experience in technology and forensics, including with performance testing and benchmarking of computer and other technological programs—explained the word “performance” can have a broad variety of meanings for a device. “To assess performance conditions,” Dr. Martin asserts that “it is important to perform tests on a device that is configured in a way that matches, as closely as possible, the configuration of the user’s device. Configuration depends both on the hardware and on what is installed on the hardware, including operating system, applications, and data.” He also adds that, “each user controls the state of his or her Device to the extent that it deviates from the basic iOS configuration,” which, along with, variations of installed software, specific device usage patterns, and network or Wi-Fi variations, will impact performance. Which is why he concluded, “the best record of what is installed on a particular Device is the Device itself.”

The Ruling:

Special Discovery Master Westerfield ruled against the plaintiff on the issue of imaging, stating that “other types of discovery would not provide sufficient information on the issue at hand,” and that “the defendant’s privacy concerns could be addressed through a robust protective order containing the following:

  • “The plaintiffs would select a neutral forensic expert to produce a mirror image of the computer’s hard drive in a timely fashion
  • “That expert would execute a confidentiality agreement and also abide by the protective order in place in the action
  • “Only that expert would be authorized to inspect or handle the computer or the mirror image (the plaintiffs and their counsel would not inspect or handle the mirror image
  • “The expert would not examine any non-relevant files or data on the computer, or anything designated as privileged or work-product protected information
  • “That expert would produce a report based upon his or her inspection that describes the files found and any relevant file-sharing information
  • “And that expert would disclose his or her report only to the defendant’s counsel, who could then lodge objections to the report based on privilege.”

SDM Westerfield also cited Herskowitz/Juel v. Apple, Inc. (N.D. Cal. Feb. 12, 2014) in which the court ordered the plaintiffs to deposit computers and devices at issue with a third-party vendor for forensic inspection, because the “data contained on Plaintiffs’ computers and devices is likely to be highly relevant, and admissible evidence under Federal Rule of Civil Procedure 26(b)(1).”

The SDM noted the potential privacy intrusions in Herskowitz/Juel were not as widespread, because only a small number of devices were imaged. In response, the number of devices available for forensic inspection was limited to much less than the 115 devices Apple had requested.

Meet and Confer:

Cooperation is the name of the game when it comes to determining whether mobile devices should be imaged and other complex eDiscovery cases like this one. And the SDM drove that home by stating the importance of both parties continuing to meet and confer, ensuring the order is carried out as determined by the court.

In her ruling, SDM Westerfield writes, “Given the above direction and following Apple’s designation of specific Devices to be examined, the meet and confer process is likely to be more productive than the parties’ past efforts. In this regard, the parties and their experts are in the best position to meet and confer on a proposal that minimizes exposure of content and private information to Apple, the parties’ experts, and Apple’s outside and inside attorneys and provides an appropriate tailored approach to discovery from these Devices.”

Written by Jim Gill
Content Writer, Ipro

 

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It’s Not Just About the Money (or Privacy): The Role of Specificity, Technology, and FRCP Rule 26

FRCP Rule 26

What Does FRCP Rule 26 Say about Scope and Proportionality?

In 2015, when the Federal Rules of Civil Procedure were amended, the issue of scope and Rule 26 was a hot topic of discussion, mainly around the issue of costs. But proportionality doesn’t just apply to the cost of discovery. With concerns around privacy becoming a daily headline due to data breaches, privacy laws, and the use of personal data by large corporations and governments, will the cry of “privacy” take the place of “burdensome costs” in proportionality rulings?

Before the 2015 amendments, it was common that broad discovery requests were submitted, which if carried out, would end up costing way more than the lawsuit was worth in the first place. For organizations with deep pockets, large discovery requests became a tactic similar to continuing to raise the bet in a poker hand until your opponent had no choice but to fold.

But since 2015, broad discovery requests or “fishing expeditions,” have been essentially banned. With the new rule, the burden to prove proportionality lies with both the requesting and responding parties. And the first two questions that should be answered are:

  • Is the information requested relevant to the outcome of the case?
  • Is the information privileged?

If the data in question passes these two tests (yes, it’s relevant to the case, and no, it’s not privileged information) then the courts look at the following six factors laid out in FRCP Rule 26(b)(1) to help determine rulings on proportionality.

  • The importance of the issues at stake
  • The amount of information in controversy
  • The parties’ access to the information in question
  • The parties’ resources to obtain the information
  • The importance of the discovery in resolving the issues
  • Whether the burden or expense of the proposed discovery outweighs its likely benefit

 

How Does Privacy Fit into the Discussion of Scope and Proportionality?

Henson v. Turn, Inc (US Court, Northern Dist. California, 10/22/2018) is a fairly recent case that deals specifically with proportionality and privacy. In it, the plaintiffs brought a class action against the defendant, claiming that the defendant engaged in the practice of using “zombie cookies” which users cannot delete, block, or opt out.

In response, the defendant requested the plaintiffs:

  • Produce their mobile devices for inspection or produce complete forensic images of their devices
  • Produce their full web browsing histories from their devices
  • Produce all cookies stored on or deleted from their devices

The court ruled that the defendant’s request to directly inspect the plaintiffs’ mobile devices or for complete forensic images of the devices “threatens to sweep in documents and information that are not relevant to the issues in this case, such as the plaintiffs’ private text messages, emails, contact lists, and photographs.”

And because the parties had protocols in place for producing information from the plaintiffs’ devices or forensic images, the defendant issued nine requests for specific information from the plaintiffs’ devices, which the plaintiffs carried out.

The same happened with the request for the browsing histories and cookies. The plaintiffs produced or offered to produce their web browsing history and cookies associated with the defendant’s partner websites and the date fields of all other cookies on their mobile devices. The plaintiffs also offered to meet and confer with the defendant to consider requests for specific cookies.

And the court ruled with the plaintiff.

 

What is the Role of Technology in Scope and Proportionality?

So why does this matter? The key here is not about scope and proportionality or even privacy. Yes, that’s the topic of the case. But the bigger issue at stake is how will the creators of legal technology respond. With Rule 26, it’s all about specificity. I want this specific data, from that specific custodian, from these specific date ranges, because it affects the case in this way. After that, it’s just an issue of having the tools to get those specific items easily and cost effectively.

In Henson v. Turn, the judge cited a case from 2006 (Sony BMG Music v. Arellanes), where a request was made for an imaging of an entire hard drive, and it was determined that the production would reveal irrelevant data, when all that was needed were specific emails. Now we have technology which allows us to target specific emails and other data on a computer. We can deNist and deDupe, we can redact, we can do all kinds of things within our eDiscovery tools which keep data within the scope and proportionality of a request. It wasn’t always so. It took the creators and innovators of technology to make it a relatively easy and standardized process.

This technology made the cries of “overburdensome discovery” seem moot. No discovery is overburdensome these days when you can pinpoint the exact data that is relevant in the case. You just have to ask for it. With the onus on the requester to follow the guidelines of FRCP Rule 26, if you make a request that’s overburdensome, you’re just being lazy. And judges aren’t having it.

With this case’s highlighting of the role of privacy in Rule 26, I think leaders in the eDiscovery industry should be looking ahead in the same way that at least some of them were in 2006. How can we create tools that allow the handling of electronic data through the entire litigation process? Only now, instead of hard-drives full of emails and word documents, it’s data from a number of unique sources that live across platforms available on mobile devices and the Internet of Things.

The guidelines for proportionality and scope are very clearly laid out in the FRCP. The only difference is the need for tools that make the process easier considering the digital landscape that exists in 2019, not just the one in 2006.

 

Written by Jim Gill
Content Writer, Ipro

 

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

FRCP Rule 37(e)

Two Recent Cases Highlight the Spoliation Thresholds in FRCP 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 FRCP 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 FRCP Rule 37 thresholds were met, doesn’t mean you should be lax when it comes to your eDiscovery processes or technology. In fact, quite the opposite. The key element of the rule is showing that “reasonable steps” were taken, and the best way to ensure that is by having a defensible and repeatable eDiscovery process in place. 

 

Written by:
Jim Gill
Content Writer for Ipro Tech

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