Authored By: Michael Tucker Jr.

Citation: In re TMI Litig., 193 F.3d 613 (3d Cir. 1999)

Employee/Employer Implicated: Plaintiffs’ Counsel

e-Lesson Learned: Continuing non-compliance with expert discovery deadlines can result in the loss of a large and important part of your case. This is especially true when a court sets a drop deadline after a party has repeatedly taken advantage of its leniency.

Tweet This: Court Goes Nuclear on Deadline Desperados

This case arises out of the nuclear reactor accident that occurred at the Three-Mile Island Power Plant on March 28, 1979. This 3rd Circuit decision was rendered more than 20 years after the incident and after a complicated procedural history that included multiple filings by thousands of plaintiffs in both state and federal court. Congressional amendment of a statute finally allowed all of the cases to be consolidated in federal court. The main issue decided on appeal was the district court’s exclusion of expert testimony, based on the gatekeeping standards of Daubert, which restricted plaintiffs’ ability to show that they were exposed to radiation sufficient to cause injury. The other issue on appeal was the award of sanctions for violations of pre-trial discovery requirements and orders. As this is an eDiscovery blog, I will be addressing the discovery and sanctions issues rather than the voluminous and complex scientific matters that arose in this nearly 200 page decision.

Authored By: Drew Manary

Citation: United States v. Steven Warshak, Harriet Warshak, TCI Media, Inc., 2010 WL 5071766 (C.A.6 (Ohio)).

Employee/Employer Implicated: Defendants (Steven and Harriet Warshak, TCI Media)

e-Lesson Learned: Good faith reliance on the Stored Communications Act may allow the government to obtain certain eCommunications without a warrant.

Tweet This: Ma Warshak, Smilin’ Bob and the Great Enzyte Fraud

Anyone who watched television during the early to middle part of the last decade would have seen an ad for Enzyte. The product purported to make male genitalia larger and used a figure referred to as “Smilin’ Bob” as its representative. The company also said the product was scientifically proven to work and would produce a size increase of up to twenty-five percent. Much to the dismay of Enzyte's Porsche-revving customers, that was all a fiction. However, it was a very successful fiction, producing hundreds of millions of dollars for the product’s creator, Steven Warshak, his mother and Enzyte employee Harriet Warshak, and his representative company. Much of the success of the product was not due to repeat business, but a system called “auto-ship” where anyone ordering the product online was automatically enrolled in (and generally uninformed of) a program which would continue shipping (and charging for) the product. Additionally, Warshak hid or omitted any disclaimers about this practice on the corporate website and further required anyone dissatisfied with the product to sign an affidavit that the product had not worked. The rationale behind this was that people would be too embarrassed to have such a document notarized. Naturally, such practices caused consumers to become aroused with anger, and file complaints with the Better Business Bureau.

Authored By: Phil Ryan

Citation: Richardson v. Sexual Assault/Spouse Abuse Research Ctr., Inc., 270 F.R.D. 223 (D. Md. Oct. 28, 2010)

Employee/Employer Implicated: Miscellaneous

e-Lesson Learned: When faced with objections to Rule 34 production requests, the proper response is to meet and confer with opposing counsel and then, if necessary, seek an order from the court. Parties should not resort to subpoenas to compel discover.

Tweet This: When faced with discovery objections, don’t put the subpoena-cart before the discovery-horses!

So you’re in the discovery stage of litigation and you make a request but the other side won’t produce. No problem you think, I’ll just subpoena ‘em. WRONG. In Richardson v. Sexual Assault/Spouse Abuse Research Ctr., Inc., Patrick Richardson filed a complaint against the Sexual Assault/Spouse Abuse Research Center (“Research Center”) alleging intentional infliction of emotional distress, tortuous interference with Richardson and his ex-wife Sheri Richardson’s divorce proceedings, and gender discrimination in violation of the Fourteenth Amendment and the Maryland State Constitution.

Authored By: Jessica K. Rauskolb

Citation: In re Grand Jury Subpoenas, 627 F.3d 1143 (9th Cir. Cal. 2010)

Employee/Employer Implicated: Government official, Outside counsel, Miscellaneous

e-Lesson Learned: Non-privileged information originating outside the U.S. that you had to produce as a result of discovery from a civil antitrust suit can get into the hands of a grand jury and be used against you in an antitrust investigation.

Tweet This: Note, discovery in civil litigation can move information within the grasp of the grand jury - and there is nothing you can do about it.

Be careful when you defend a civil suit that was triggered by a government investigation! When you respond to discovery requests and produce material which was previously not within the reach of the grand jury, the government can subpoena these documents! A civil protective order will not do you any good! The defendants in In re Grand Jury Subpoenas had to find that out the hard way.

Authored By: M.J.R.

Citation: Jannx Medical Systems, Inc. v. Methodist Hospitals, Inc., 2010 WL 4789275 (N.D. Ind., Nov. 17, 2010)

Employee/Employer Implicated: Outside Counsel, In-house Counsel, Senior Management, information technology manager

e-Lesson Learned: Discoverable data must be produced in a reasonably usable form in which it is ordinarily maintained and not in a format more difficult for the requesting party to use in litigation.

Tweet This: Indiana Court hands down a harsh punishment for shady electronic discovery practices!

Not only was Jannx scolded by the District Court on three separate issues, they are now responsible for significant legal fees, and lost a motion to protect their own data. It’s safe to say the Indiana District Court was not impressed with the Jannx legal team. Basically, this case involves a dispute over pre-trial discovery motions between the plaintiff, Jannx Medical Systems and defendants, Methodist Hospital, Crothall Healthcare, Inc., and Propoco Professional Services. The Court issued an opinion and order on Defendant’s motion to get Jannx to comply with electronic discovery and Jannx’s motion to withhold electronic data from discovery by reason of trade secrets, etc.

Authored By: Drew Manaray

Citation: In re Stern, 321 S.W. 3d 828 (2010); 2010 Tex. App. LEXIS 7382

Employee/Employer Implicated: PLaintiff

e-Lesson Learned: Discovery is generally construed very broadly by courts, but a line will be drawn when requests are overbroad or irrelevant. This is true with electronic production requests as well.

Tweet This: Just because you are attempting to compel production of electronically stored information does not entitle your requests to be overly broad!

­­­­­­­­­­­­­­­­­­In In re Stern, Virgie Arthur, mother of the late Anna Nicole Smith, alleged that Howard K. Stern, Smith’s former attorney, and others in the media (particularly television and internet gossip programs) had engaged in a conspiratorial effort to defame her and harm her efforts to maintain custody and visitation rights of Smith’s daughter. Arthur challenged Stern’s assertion that he was father to Smith’s newborn daughter, thereby causing Stern to engage in a conspiracy in which his sister, Bonnie, as well as additional parties (Nelda Turner, Lyndal Harrington and Theresa Stephens) found “dirt” on Arthur and then posted it on the internet. Further, Stern and his alleged conspirators had provided gossip website TMZ with a tape and transcript of an interview in which Smith accused Arthur of “being complicit in child abuse” committed against Smith when she was a child.

Authored By: Michael Tucker Jr.

Citation: Orbit One Communs. V. Numerex Corp., 2010 U.S. Dist. LEXIS 123633 (S.D.N.Y. 2010)

Employee/Employer Implicated: Information Technology Administrator; Outside Counsel; Owner/Executive

e-Lesson Learned: Mere inadequacy of preservation efforts does not warrant sanctions unless it can be shown that discovery-relevant evidence has been lost. Despite that, it is better to adequately prepare for and execute a proper litigation hold than rely on dumb luck and coincidence to avoid sanctions.

Tweet This: Plaintiff not sanctioned for ESI preservation failures when comprehensive failures did not actually result in lost evidence.

In 2006, Numerex, a satellite communications company, began attempts to acquire Orbit One, which was owned by David Rosen, Scott Rosenzweig and Gary Naden. These negotiations resulted in an asset purchase agreement signed in July 2007, under whose terms Rosen, Rosenzweig, and Naden would continue on with Numerex, with Rosen becoming president of the new division. Around the same time Naden’s former company, Axxon initiated suit against Orbit One and Orbit’s attorneys ordered a litigation hold to ensure preservation of information relating to that controversy.

Authored By: Eric Abes

Citation: Gallagher v. Crystal Bay Casino, LLC et al., 2010 U.S. Dist. LEXIS 124421 (D. Nev. Nov. 8, 2010)

Employee/Employer Implicated: Owners; Executives; Counsel

e-Lesson Learned: Failure to preserve evidence can be fatal, financially and judicially.

Tweet This: Whether a company keeps everything, or waits until a trigger to begin preservation, they should consult a lawyer to develop the proper plan for their company.

When I was a kid, every year at Hanukah, my mom had a one in one out policy for toys. If I got a new Transformer, I had to donate an old toy to Goodwill. It taught me two important lessons: always think of those less fortunate and try to keep the clutter in your home to a minimum. My fiancé cannot bear to part with anything. About five years ago she lost weight and went from a size 14 to a size 8. Today, half of her closet is filled with clothes that are 6 sizes too big for her. Which one would you rather have for a client?

Authored By: Danielle Y. Alvarez

Citation: Gates v. Wheeler, A09-2355, 2010 Minn. App. Unpub. LEXIS 1136 (Minn. Ct. App. Div. Nov. 23, 2010)

Employee/Employer Implicated: Co-owner

e-Lesson Learned: Secret email surveillance offends the orderly system of discovery. Don’t do it!

Tweet This: There should be no secret about your company’s email surveillance policy.

As the Appellate Court in Minnesota aptly noted, the rules of civil procedure exist for a reason―they provide us with an orderly system of discovery. Do not attempt to circumvent these rules. Secret email surveillance is never a good idea. This point was made very clear in Gates v. Wheeler. Richard Gates and Matthew Wheeler were co-owners of RSR, which was a limited liability company in Minnesota. Over time, the men’s relationship soured and this led to deadlock in their management of the company. Clearly, the time arrived for their professional relationship to end.

Authored By: S.S.K.

Citation: Estate of Davis v. Spriggs, 2010 WL 4817348 (Delaware County Nov. 19, 2010)

Employee/Employer Implicated: Miscellaneous employees

e-Lesson Learned: Having an “Evidence Eliminator” program which destroys electronic data on a computer upon start-up can justify incidental deletion of evidence when your job involves sensitive information.

Tweet This: OH AppCt: It’s legal to destroy incriminating evidence on your computer! (Sometimes.)

Again with the scandalous sex tapes? Seriously? With all the publicity surrounding leaked sex tapes coupled with the prevalence and ease of digital communication, one cannot honestly believe such a tape will remain a well kept secret. You’ll receive no sympathy on this blog for your escapades, and you’ll receive no sympathy in the Ohio court system, either. In Davis v. Spriggs, Spriggs was suing her former husband (Davis) for posting pictures and video on an adult website after the divorce settlement, signed a few months prior, specifically prohibited such distribution. Spriggs discovered these pictures after logging into a members-only adult website which sent her enough email spam she just had to check it out. Whilst cruising the racy adult website she also discovered pictures of her ex’s new girlfriend.