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Welcome to the new eLessons Learned
eLessons Learned features insightful content authored primarily by law students from throughout the country. The posts are written to appeal to a broad spectrum of readers, including those with little eDiscovery knowledge.
Each blog post: (a) identifies cases that address technology mishaps; (b) exposes the specific conduct that caused a problem; (c) explains how and why the conduct was improper; and (d) offers suggestions on how to learn from these mistakes and prevent similar ones from reoccurring.
Visit our signature feature, e-Discovery Origins: Zubulake, designed to give readers a primer on the e-discovery movement through blog posts about the Zubulake series of court opinions which helped form the foundation for e-discovery. Go There
Interested students may apply for the opportunity to write for e-Lessons Learned by filling out the simple application. Go There
In Timken Co. v. U.S., the plaintiff ("Timken" or "Plaintiff") challenged the decision of the Department of Commerce, International Trade Administration ("Commerce"), denying Plaintiff access to computer tapes submitted by defendant-intervenors (the "Defendant") in a complex trade case. Timken sought the tapes notwithstanding that it had received the very same information in paper form. Plaintiff advocated its position by discussing the hardship that would be imposed if Plaintiff had to reproduce the tapes itself. Plaintiff demonstrated that it would require 7,500 man-hours and a legion of "keypunchers," at a total cost of approximately $200,000 to duplicate what Commerce already had in its possession. With respect to the need for the tapes, Plaintiff indicated that without the tapes it would not be able to identify factual errors in the data and other mathematical or methodological errors. Commerce countered the above points by arguing that if it had to supply the tapes, it would have to expend significant energy insuring that customer names had been deleted and assisting Plaintiff with mechanical problems that may arise. Commerce also asserted that if it was compelled the tapes companies would be less likely to store information on tapes moving forward, to prevent disclosure. In reviewing the merits, the Court of International Review applied the standard expounded in the applicable legislative history; that is, "whether the need of the party requesting the information outweighs the need of the party submitting the information for continued confidential treatment." The court first concluded that the cost factored weighed in favor of Plaintiffs. Not only were Plaintiff’s costs to reproduce high, but also Plaintiff was willing to offset any costs to Commerce. This process also minimized the involvement, and therefore the burden, of Commerce. With respect to the argument that the tapes were required by Plaintiff to independently analyze the data, the court found that access to the tapes was essential for effective advocacy, and that such work by Plaintiff would not constitute a "duplication of administrative functions." Finally, the Court dismissed Commerce's argument that companies would no longer maintain data on tape: "[I]t is unlikely that the mere possibility of trade litigation in the United States would prompt foreign exporters to return to archaic business procedures." Although not articulated as such, the court engaged in a proportionality analysis typically applied to discovery disputes in federal courts. Plaintiff's willingness to offset the costs to Commerce seemed to sway the court, just as it would in a typical discovery dispute. Another principle to be extracted from this case is the value inherent in having data in a particular form. This may be an area where practitioners miss the boat. A savvy e-disco attorney will know the ins and outs of how different forms of data can be manipulated, and the form most ideal for recovering (or inhibiting recovery) of particular information. So practitioners should remember at their next meet and confer, just getting the information may not be enough—form may be critical. Adam L. Peterson is a graduate of Seton Hall University School of Law. Adam was a member of the Seton Hall Law Review and, prior to law school, Adam was an Environmental Analyst with the New York State Department of Environmental Conservation.
It seems that courts were ruling on the intersection of new technology and discovery practice back in the day. In 1986, the United States Court of International Trade decided motions to compel discovery regarding new technologies in Daewoo Electronics Co., Ltd. v. U.S. The court even noted that “[t]his controversy is a good example of how the development of new technology for using, storing and transmitting information allows parties to test the rules of disclosure or discovery.” There, the court grappled with whether the Department of Commerce met their burden of producing certain documents. The Department of Commerce was accused of committing three faux pas: (1) the tapes provided to the plaintiff was recorded at a much greater density than was stated, (2) data regarding the sale of two separate companies was requested, but not provided, and (3) the government failed to provide material known as an SAS data set. The government argued that they were in strict compliance with an earlier order mandating that they turn over certain evidence. However, the court expressed that it was troubled “by indications that [the government] took an inordinately restrictive view of its obligations under the order.” The government, when ordered to turn over certain tapes, turned over the tapes themselves (which the plaintiff was unable to read), as opposed to the data contained on the tapes. “To say that the data sets into which the computer tapes were transferred are not governed by an order speaking of computer tapes is as if someone has said at the dawn of the era of typewriters that types documents are not governed by a court order speaking of ‘writings.’” Further, the court noted that if the government was acting in earnest, then they had “taken unfair advantage of the court’s lack of familiarity with the variety of further electronic refinements and embodiments of taped information.” Thus, the court granted the plaintiff’s Motion to Compel, setting a precedent for reasonable interpretation of words surrounding new technologies. Matthew G. Miller, a Seton Hall University School of Law graduate (Class of 2014), focuses his practice in the area of Intellectual Property. Matt holds his degree in Chemistry from the University of Chicago. During law school, Matt worked as a legal intern at Gearhart Law, LLC.
“Although not unlimited, relevance, for purposes of discovery, is an extremely broad concept.” See Condit v. Dunne, 225 F.R.D. 100, 105 (S.D.N.Y. 2004). The discovery process is essentially a fact-finding mission. In theory, opposing parties are supposed to work together to make the litigation process more efficient. When both sides refuse to comply, additional motions are required result in additional costs. In the case above, Assured Guaranty Municipal Corp. (“Assured”) wrote financial guaranty policies on three residential mortgage-backed securities (“RMBS”) sponsored by UBS Real Estate Securities Inc. (“UBS”). Id. Assured claimed that UBS breached their contractual obligations by providing false information in regards to credit. Assured filed a motion to compel the production of documents that were generated shortly after the transactions mentioned above. UBS claimed that the documents were irrelevant to the case at hand, and furthermore, such production would be unduly burdensome. The court mentioned that so long as the discovery appears reasonably calculated to lead to the discovery of admissible evidence, it will likely be permissible. The court also stated that only when the burden or expense of the proposed discovery outweighs its likely benefit will the court limit discovery. The court considered: the needs of the case; the amount in controversy; the parties' resources; the importance of the issues at stake in the action; and the importance of the discovery in resolving the issues, will the court limit discovery. The court granted Assured’s motion to compel against UBS. Conversely, UBS claimed that Assured also failed to comply with discovery demands. Assured allegedly failed to provide three categories of documents they claim are not related to the transaction at issue. The documents sought were thought to contain information about Assured's knowledge of the originator's underwriting policies and its knowledge of the practices of the rating agencies. Assured wanted documents to be provided to them; however, Assured has refused to cooperate in return. The court held that the documents requested by UBS could contain information very relevant to the initial contract dispute. This being the case, the motion to compel discovery against Assured was granted. Finally, the parties seemed to have disagreement about the search terms that will be used to search various sources for relevant information. In this regard, the court declined to step in as no expert opinions were provided and the court did not have “technical expertise.” The court left the parties with three options: The parties could learn to cooperate and agree on certain criteria, the parties could re-file a motion to compel with expert affidavits, or the parties could seek the assistance of a neutral independent consultant. The court ultimately left this decision to the parties. In summation, this case demonstrates that failing to cooperate with discovery is essentially a huge waste of time. As we see here, in the end, the court granted both motions to compel. The documents the parties attempted to hide were eventually exchanged. In a profession where time is money, attorneys cannot afford to stall and prolong the very process that makes our system function efficiently.
Whenever sanctions are involved, you can expect to see questionable behavior from one or more parties. In this particular case, a pro se litigant tried to be cute and the court called him out for it. The Appellant here used to own a company which provided consulting services to the Appellee. Since the company became defunct, the owner became the only remaining party being sued. The district court had entered a discovery preservation order in which the parties agreed the appellant would return a laptop computer along with all of its data. However, the appellant deleted data off the laptop minutes before signing the agreement. Then the appellee initiated post-settlement litigation to obtain sanctions. The appellant’s attorney then withdrew and the appellant continued pro se. The judge found the appellant to be in civil contempt and awarded sanctions of over $50,000. The appellant raised three contentions on appeal. First he argued sanctions under 28 U.S.C. § 1927 could only be awarded against attorneys, not pro se individuals. Circuits are split on this issue. The Third Circuit navigated around the issue, asserting that the district court judge could have justified its sanction under other grounds. Second, the appellant argues that monetary sanctions should not have been awarded because the information was deleted before the discovery agreement was signed. The Third Circuit called out the argument as being a bit too clever and was not persuaded. It all but accused the appellant of deliberately misleading the district court. More damning was the actual language of the agreement. It exposed the appellant to liability arising from the agreement itself, which governed the return of the laptop. Third, the appellant challenges the award for all attorneys' fees. On this issue the Third Circuit remanded for a determination of what fees fairly reflect compensation for the appellant's contumacious conduct. What is more vital here is the punishment for deleting data off the computer. Those who try to outsmart the court will get their just deserts and acting pro se does not provide any sort of loophole.
On October 7, 1992, the United States Department of Commerce created an antidumping on extruded rubber thread in Malaysia. The intent of antidumping orders is to discourage the “dumping” of foreign goods into the U.S. for substantially lower prices. The Department of Commerce sought financial records from international companies involved in the importing and exporting of the antidumping order(s), in order to create accurate administrative reviews of the collected information. From the Department. of Commerce’s results, the U.S. determines dumping margins for each “dumping” importer. If there is a challenge to the Department of Commerce’s final results, the court that oversaw the case would sustain the Department of Commerce’s final results as long as they are supported by substantial evidence on the record. “Substantial evidence” is defined as more than a “mere scintilla” supporting a conclusion. The main issue being challenged by Heveafil is that the Department of Commerce refused to base Heveafil’s dumping margin on their bill of materials, determining the bill of materials to have failed verification. The court held that the Department of Commerce was within its discretion because Heveafil’s production of the bill of materials, downloaded on a computer disk in response to the government’s questionnaires and requests for information, was not generated “in the ordinary course of business,” which the government required as part of verification of documents. Since, the bill of materials was originally maintained on database, that was later purged, the computer disk produced did not meet the government’s verification requirements. Alternatively, Commerce attempted to verify the information through other sources and documents but Heveafil’s 1996 Budget Report was not given its entirety and the partial Budget Report and inventory records did not correlate. Given the unverified documents, the court reasoned that the Department of Commerce could reject the financial records in total, even though Heveafil challenged that it only failed verification for a portion of its information. The government stated in its final results, which the court agreed with, that it does not make sense to only reject the part of Heveafil’s records that were unverifiable since the Department of Commerce was doing price-to-price comparisons. Due to Department of Commerce’s rejection of Heveafil’s records in total, the government used adverse inferences in assigning Heveafil’s dumping margin. Heveafil challenged the government’s determination that Heveafil did not cooperate during the review, which is necessary to show, along with not submitting verified data, in order to use adverse inferences. However, the court sustained the government’s determination that Heveafil did not cooperate to the best of its abilities, due to the fact that Heveafil was given plenty of notice that the government required “source documents” for review and was aware of the process since Heaveafil had previously participated in reviews, yet deleted the relevant bills of material. The Department of Commerce defines “source documents” as documents that are maintained in the normal course or business, which the computer disk duplication of the bills of materials was not. The court went on to sustain all but one determination by the Department of Commerce despite Heveafil’s, and fellow plaintiff, Filati’s, challenges. The government chose to select the highest rate calculated in a prior administrative review in determining the dumping margin for each company. The government’s selection of the highest dumping margin chosen for plaintiffs was sustained due to the discretion given to Commerce after having shown that adverse inferences were appropriate.
This case involves a contractual dispute worth $41 million between Juster and North Hudson Sewerage Authority (NHSA). Juster issued a request for production of documents that included 49 requests for documents and a list of 67 proposed search terms. Some of these terms included words such as “fee,” “debt,” “tax,” and “SEC.” NHSA argues that the court should grant a protective order because it already produced 8,000 pages of documents and felt these search terms were too vague. Additionally, NHSA stated that if the court did not grant its protective order, the cost for producing these documents and running the searches should be shifted to Juster. The court did not agree with NHSA’s claims. Not only was there a lack of evidence that the data requested here was inaccessible, the court also applied the seven-factor test set forth in Zubulake v. UBS Warburg. This case has been adopted by the Third Circuit in cases that involve fee shifting. The Zubulake factors include: The extent to which the request is specifically tailored to discover relevant information; The availability of such information from other sources; The total cost of production, compared to the amount in controversy; The total cost of production; The relative ability of each party to control costs and its incentive to do so; The importance of the issues at stake in the litigation; and The relative benefits to the parties of obtaining the information In applying the Zubulake factors to this case, the court held that fee shifting is not warranted. The requests for electronically stored information (ESI) were tailored, as the searches were restricted to a specific time period (2011-2012). Second, it is unknown if this information is available from other sources. The third, fourth, and fifth factors are concerned with the costs associated with the request for ESI. Here, the court found that given the amount of damages at stake, NHSA’s ability to absorb the costs of the ESI requests, and the projected costs are not substantial enough to justify fee shifting. The fact that the litigation had $41 million at issue and the cost of running the keyword searches was approximately between $6,000 and $16,000, the court felt fee shifting would be inappropriate. The final factors are not relevant to this litigation as this is a private contractual dispute between two parties and no public policy is implicated. Overall, these factors weigh heavily in favor of Juster. As a result, this case illustrates that courts are reluctant to sway from the idea that it is the responding party that bears the costs in complying with discovery requests. Only when there is an undue burden on the responding party, or inaccessibility of information, will the court consider fee shifting. Yet, given today’s society, most information is accessible. Additionally, when both parties have comparable discovery requests and both agree to pay their own costs in producing discovery, fee shifting is even less likely to occur. Jennifer Whritenour received her B.S. in Political Science and History in 2011 from the University of Scranton. In May 2014, she received her J.D. from Seton Hall University School of Law.
The defendant in personal injury litigation commonly requests discovery concerning a plaintiff’s Facebook account. The reason such requests are made is that pictures on Facebook may reveal the “injured” plaintiff dancing on top of a bar table, skiing, traveling, etc. These damaging photos may prove that the plaintiff’s injury is not as severe as he or she claims and could result in dismissal of the case. Therefore, it is not uncommon for a plaintiff to delete his or her Facebook account in order to conceal any damaging pictures. The deletion of a Facebook account, however, may result in sanctions such as an adverse inference jury instruction. In Gato v. United Airlines, Inc., the plaintiff was injured while working for the defendant. During the litigation, the plaintiff permanently deleted his Facebook account. The defendant motioned for an adverse inference jury instruction claiming that the deletion of the Facebook account destroyed relevant evidence, thereby prejudicing the defendant. In granting the sanction, the district of New Jersey adopted a very low standard as to what a litigant must show in order to obtain an adverse inference jury instruction. The court held that “so long as evidence is relevant, the offending party’s culpability is largely irrelevant, as it cannot be denied that the opposing party has been prejudiced.” This seemingly simple sentence has enormous implications for litigants in the district of New Jersey for two reasons. First, it means that as long as the destroyed evidence was relevant, a litigant need not prove that the adversary intentionally (or even negligently) destroyed evidence. The lack of state of mind requirement eliminates what is often the most difficult element to prove when seeking spoliation sanctions. Without the need to prove a litigant’s culpability in destroying the evidence, the court seems to impose a form of strict liability upon the destroying party. The only requirement imposed by the court is that the party seeking sanctions prove that the destroyed evidence was relevant. This is a significant deviation from the traditional method employed by courts which requires proof that a party was at least negligent in destroying the evidence. Second, the court indicates that as long as the evidence is relevant, it will presume that the destruction of the evidence was prejudicial to the opposing party. This eliminates the need for the party seeking sanctions to prove that it was prejudiced by the missing evidence. Instead, the party only needs to prove that the evidence was relevant. Notably, the court explained that the defendants in Gato were “prejudiced because they have lost access to evidence that is potentially relevant to Plaintiff’s damages and credibility.” In other words, the defendant in Gato did not have to even prove that the destroyed evidence was undoubtedly relevant—the defendant only had to prove that the evidence was potentially relevant. In sum, the District of New Jersey imposed an adverse inference jury instruction simply because the destroyed evidence was potentially relevant to the litigation. The court did not require the defendant to show that it was prejudiced by the destruction, nor did the court require any showing as to the Plaintiff’s state of mind in destroying the evidence. Moving forward, litigants must be extra careful in their efforts to preserve evidence relevant to litigation. E-DiscoParty, a Seton Hall University School of Law graduate (Class of 2014), served on the executive board of the Seton Hall Law Review and is a member of the Interscholastic Moot Court Board. Currently, E-DiscoParty clerks for a Justice on the Supreme Court of New Jersey.  An adverse inference jury instruction is a powerful sanction where the court advises the jury to presume that any destroyed or missing evidence contained detrimental information about the party that destroyed or lost the evidence.
Background Omega Engineering Corporation, an international company based in New Jersey, was once the employer of Timothy Lloyd. To put Omega’s importance into perspective, the U.S. Navy and NASA were two of their clients for highly specialized and sophisticated industrial process measurement devices. According to testimony during the trial, Lloyd worked at Omega as its sole system administrator from 1985 through 1996. In 1995, Lloyd had undergone Novell network training and installed Novell software on Omega’s computer system. Additionally, Lloyd was the only person who maintained and had top-level access to the Omega network. Between 1994 and 1995, Lloyd became belligerent and increasingly truculent. Due to his poor interpersonal skills, he was demoted in May 1995 from manufacturing to support engineer. A woman who had once been Lloyd’s subordinate and had engaged in a romantic relationship with Lloyd, was the individual responsible for replacing Lloyd as manufacturing supervisor. In June 1996, Lloyd instituted a policy to “clean up” all of the individual computers in Omega’s manufacturing department. It was unclear as to why Lloyd was implementing company policies after his demotion. Nonetheless, the policy required employees to save their files to the company’s file server and prohibited them from making their own backups. Lloyd’s manager became suspicious of this policy and requested from Lloyd access to the file server. Lloyd never complied. By the end of June, upper management had enough of Lloyd’s behavior and terminated him in early July 1996. On July 31, Omega’s file server would not boot up. All of Omega’s manufacturing programs on the server, which contained instructions for operating the machines, were gone. Multiple computer experts were brought in to recover the files, but to no avail. The files had not only been deleted, but also had been “purged,” meaning that they were rendered unrecoverable. A leading expert on Novell networking testified at trial that this could only have been done intentionally and by someone with supervisory-level access. The government’s theory included that on July 30, anyone who would log on to the server at any time after that date would “detonate” a program installed by Lloyd that would destroy the information on the Omega file server. The government’s theory was bolstered by the fact that the Secret Service recovered missing Omega backup tapes that had been reformatted as well as a master hard drive from the file server. This had the same string of commands that had functioned as the time bomb program found on the Omega file server. The Decision Ultimately, Lloyd was found guilty of computer sabotage. The jury had deliberated for over twelve hours over the span of three days and had requested testimony in the jury room before they reached their verdict. However, three days after the verdict, one juror said that she had seen on the news, during the trial, about a computer virus called the Philippine “love bug” which allowed the perpetrator to cause great harm by flooding the victim computers and causing them to crash. Whether this affected her decision is unclear; however, the defendant claimed that his 6th Amendment rights had been violated. The district court agreed, granting a new trial. On review, the Court of Appeals reversed the district court’s holding. After a lengthy discussion, the court said that there were significant dissimilarities between the “love bug” and the “time bomb” and most jurors would not confuse the two. Therefore, the appellate court found, the defendant was not prejudiced. Lloyd’s managers should never have allowed a single employee hold as much power as they did. This case highlights the vulnerabilities the company subjects itself to if that is allowed to happen. For example, Omega lost over 1,200 programs and many current and potential clients as well. Akiva Shepard received his J.D. from Seton Hall University School of Law in 2014. Akiva has worked for a New York State Supreme Court Judge in Kings County, and for a NJ real estate firm.
Plaintiff Erick Zayas joined with the Equal Employment Opportunity Commission (EEOC) to sue Ventura Corp. for employment discrimination on the basis of sex in 2007. In essence, Zavas complained that Ventura’s long-standing tradition of hiring women for the position he applied to was discriminatory. Furthermore, Zavas alleged that Ventura destroyed relevant evidence. In its answer, Ventura stated that the fact that no men have filed applications or have not met the position requirements did not support the plaintiffs’ assertion of discrimination. However, during limited discovery a list revealed that qualified men did in fact apply and accounted for 34.5 percent of qualified applicants. The central issue involved application materials received by Ventura. These included materials submitted by e-mail and hard copy resumes. The court first notes that spoliation is “the failure to preserve evidence that is relevant to pending or potential litigation.” The duty to preserve relevant evidence arises once litigation is reasonably anticipated. The court noted that since Ventura was notified in 2007 that it was being charged with sexual discrimination, at that point Ventura should have reasonably anticipated litigation and was thus under the duty to preserve. Ventura attempted to make a statutory argument that resumes did not need to be preserved. The relevant statute, 29 CFR 1602.14 (see http://www.law.cornell.edu/cfr/text/29/1602.14), makes reference to “application forms” and “test papers.” Ventura argued that it required neither application forms nor test papers and that resumes were not mentioned. However, the court rejected this argument. The court noted that the statute also includes the language, “other records having to do with hiring.” The court ultimately held that resumes therefore clearly applied. Ventura’s Human Resource Analyst testified that certain documents were shredded or taken to a warehouse as a result of an office restructuring in 2009. Furthermore, the HR Analyst wasn’t able to find the said documents. The plaintiffs were therefore able to establish that Ventura either lost or destroyed the resumes between 2007 and 2010. Because Ventura was on notice since 2007, the disappearance of these documents constituted a violation of its duty to preserve relevant evidence. Soft copies of resumes delivered by e-mail were also lost in the same time period. In fact, th plaintiffs were able to produce a relevant e-mail to and from Ventura, while Ventura was not able to produce the very same e-mail. This e-mail alone and the fact that other relevant e-mails likely existed in the 2007-2010 period but were nowhere to be found, was sufficient to infer that Ventura likely destroyed them. The court held that sanctions were in order for Ventura’s violation of its duty to preserve. As a result of Ventura’s failure to preserve relevant evidence, the court imposed a “spoliation instruction” or adverse inference instruction. Such an instruction allows the trier of fact to infer that the content of the destroyed relevant evidence was damaging to Ventura’s case. Lesson learned? If you intentionally or unintentionally destroy relevant evidence while under a duty to preserve, an adverse inference instruction will likely bring swift defeat and sway the trier of fact against you. It’s best to preserve evidence and maintain your credibility with the court and trier of fact even with bad facts. Rocco Seminerio is a Seton Hall University School of Law graduate (Class of 2014). Mr. Seminerio focuses in the areas of Estate Planning, Elder Law, and Health Law. He graduated from Seton Hall University in 2011 with a degree in Philosophy. He also has an interest in the life sciences.
In Haskins v. First Am. Title Ins. Co., the court was asked whether a title insurance company (the "Insurer") is in "control" of documents that are in not in the Insurer's possession, but where the Insurer has the contractual right to direct those with possession to produce the documents. The district court found in the affirmative, demonstrating that in some circumstances, the more extensive one's contractual rights, the more extensive its obligations in discovery. The plaintiffs sought class certification, which defined the class as all New Jersey consumers who paid premiums in excess of regulated title insurance refinance rates during the class period. The plaintiffs alleged that the Insurer had overcharged for title insurance over a period of several years. During discovery, plaintiffs sought certain documents in the possession of certain independent title agents, who were not employees of the Insurer, but with whom the Insurer had a contractual relationship. The representative contracts made all documents "available for inspection and examination by [the Insurer] at any reasonable time." The court inquired as to whether such documents are in the "control" of the Insurer, because pursuant to Fed. R. Civ. P. 34(a), a party may request another party to produce documents within that party's "possession, custody, or control." Thus, if such documents were in the "control" of the Insurer, the plaintiffs could properly request that they be produced in discovery. The Insurer argued that it should not be required to produce documents in the physical possession of its agents because it does not possess or control the requested documents. However, the court did not struggle to conclude that the Insurer's agency contracts plainly indicate that it has control over and access to the documents. It drew this conclusion based on the premise that there is control if a party “has the legal right or ability to obtain the documents from another source upon demand.” Haskins demonstrates the potential for increased discovery obligations for those that have negotiated extensive rights in contract. That is, the greater rights in contract, the potential for broader obligations in discovery. While this factor may not drive the decision making for those negotiating contracts, contract parties should at least be aware of this consequence Adam L. Peterson 2014 graduate of Seton Hall University School of Law. While at Seton Hall, Adam was a member of the Seton Hall Law Review and prior to law school Adam was an Environmental Analyst with the New York State Department of Environmental Conservation.