Citation: Arista Records, LLC v. Usenet.com Inc., 2009 U.S. Dist. LEXIS 5185 (S.D.N.Y. Jan 26, 2009)
Employee/Employer Implicated: Owner
e-Lesson Learned: Generally, a court may not impose sanctions on a party for failing to provide ESI lost as a result of a routine, good faith operation of an electronic system. However, when a party is under a duty to preserve information because of pending or reasonably anticipated litigation, intervention in the routine operation of an information system is required.
Twitter This: Arista Records to Usenet: Time to Face the Music --> http://ellblog.com/?p=1722
In their neverending quest to alienate every single music listener on the face of the earth, Arista Records and several other recording industry heavyweights filed an action against Usenet.com and its operator, Gary Reynolds, for copyright infringement. As a commercial Usenet provider, Usenet.com allowed its subscribers to upload content to its servers by posting it one of its newsgroups and to download content posted in the newsgroups by other subscribers. In so doing, the plaintiffs claimed Reynolds had stored, and continued to store, vast amounts of digital music files on his Usenet.com servers for distribution in violation of the plaintiffs’ copyrights.
Upon filing its complaint, the plaintiffs requested that Reynolds produce all data on the Usenet.com servers concerning digital music files (“Music Files”) and requests by his subscribers to download and upload Music Files through his service (“Usage Data”). Instead, the plaintiffs claimed, Reynolds took affirmative steps to destroy large quantities of Music Files and Usage Data on his servers. Because Reynolds failed to provide any useful data requested by the plaintiffs, the plaintiffs filed a motion to sanction the defendants for despoiling evidence.
Citation: KCH Services, Inc. v. Vanaire, Inc., No. 05-777-C (W.D. Kentucky July 22, 2009).
Employee/Employer Implicated: Computer Software Manager at Vanaire Inc.
e-Lesson Learned: If a party is put on notice of a potential lawsuit, then it is responsible for not deleting any computer software that may be essential for the opposing party’s discovery process.
Twitter This: Think Twice Before Pressing Delete -- http://ellblog.com/?p=1646
Vanegas Sr. of Vanaire, Inc. ordered his employees to delete any software on Vanaire, Inc.’s computers that was not purchased and owned by Vanaire, Inc. Vanegas Sr. anticipated a lawsuit by KCH Services, Inc. (“KCH”) and deleted the software knowing the downloaded software would be crucial to the discovery process of that lawsuit. KCH filed a motion for default judgment, sanctions, or adverse-inference instruction due to spoliation of evidence, refusal to provide discovery and tactics to block or impede discovery.
In October 2005, KCH President telephoned Vanegas Sr., because he believed Vanaire was using KCH’s software. Ten years prior, Vanegas Sr. was involved in litigation with KCH and knew of KCH’s willingness and ability to file suit. Despite this past experience, after receiving the telephone call, Vanegas Sr. ordered all of his Vanaire employees to delete any software used on Vanaire computers that he did not purchase.
One month later, November 23, 2005, KCH filed a complaint, and on December 14, 2005, KCH sent an evidence preservation letter to Vanegas Sr. Continue reading »
Citation: United States v. Maxxam, Inc., 2009 WL 817264 (N.D.Cal.)
Employee/Employer Implicated: Owner, in-house counsel, outside counsel, service provider
e-Lesson Learned: A corporation must preserve all evidence as soon as it becomes aware that the evidence is relevant to pending or potential litigation. A corporation that willfully breaches this duty is subject to sanctions ranging from an adverse inference jury instruction to dismissal of its claim.
Twitter This: Timber! Court chops down government’s spoliation case. U can’t preserve evidence U don’t know U have a duty 2 preserve http://ellblog.com/?p=1634
Defendant Maxxam was accused of willfully destroying evidence that the government claimed would have aided its case. The government alleged that Maxxam, a lumber company, fraudulently prepared a report that overstated the minimum amount of trees it could safely cut down while remaining economically viable. The government further alleged that VESTRA, a consultant retained by Maxxam’s law firm, willful destroyed key data used in this report.
e-Lesson Learned: A document-heavy case imposes substantial discovery burdens on both parties. But, if the court feels the hours spent on production are excessively high, and that full compensation for such work would inflate the total fee award to an unreasonable extent, the court will decrease attorney fee requests to a more reasonable amount.
Twitter This: Don't be overzealous when it comes to ediscovery. Leave no stone unturned or theory untested not always the best mantra
In this contract dispute, the prevailing defendant, ChoicePoint, moved for attorneys’ fees, including fees for document review and production.
The plaintiff, Corinthian Mortgage Corporation, d/b/a, SouthBanc Mortgage (“SouthBanc”), and Defendant ChoicePoint Precision Marketing, LLC (“ChoicePoint ”), a mailing list broker, entered into an agreement (the “Service Agreement”) wherein ChoicePoint agreed to assist in developing a methodology for creating lists of names and individuals to whom SouthBanc could mail targeted promotional materials.Soon after, Theresa Ritter (“Ms. Ritter”), Vice President at SouthBanc, was terminated.Ms. Ritter formed a competing company in Virginia, Summit Financial LLC (“Summit”).Subsequently, Summit requested names from ChoicePoint, using name selection criteria similar to SouthBanc’s. ChoicePoint provided the requested information to Summit and continued to supply names.Of course SouthBanc was not happy and sued ChoicePoint, alleging that ChoicePoint violated the covenant of good faith and fair dealing (Count I), violated Massachusetts’ Unfair Trade Practices Act (Count II), and breached the Contract between the parties (Count III). Continue reading »
e-Lesson Learned: Counsel has an obligation to know what discoverable information his client has, to instruct his client to preserve relevant information, and to take reasonable steps to ensure that the instruction is being followed. The client has an obligation to take that instruction to heart.
Twitter This: Zubulake Episode V: The Employer Strikes Back
Thisis the fifth chapter in our Zubulake series.
Zubulake’s suit against UBS was your typical, run on the mill, employment discrimination case.However, along the way it has now become one of the seminal e-discovery cases.
Zubulake V is concerned with the plaintiff’s request for electronically stored information (“ESI”), in particular, e-mails.This motion was made after two years of attempting to get the information that she requested.The court was faced with the issue of whether to issue sanctions on UBS for its failure and delay in producing relevant evidence and if so whether UBS acted negligently, recklessly, or willfully.
The UBS’s lawyers did make some efforts to preserve evidence.They told employees to not delete relevant information.They instructed IT personnel to preserve back up tapes.And they met with key individuals and explained that the need to preserve all relevant evidence.However, it eventually came to light that these efforts were not enough. Continue reading »
Employee/Employer Implicated: Laura Zubulake, a terminated employee of Defendant UBS Warburg LLC; Owners/Executives and IT Departments
e-Lesson Learned: This case is a wake-up call for organizations and individuals: If your electronic records are in a mess, you better clean the mess up because courts are no longer handing out free “undue burden” passes, which previously excused defendants from having to produce documents at large costs.
Twitter This: Zubulake I: The Epic Saga of the Discovery of E-Discovery
For those of you that have been living under an e-discovery rock, and therefore have never heard of Zubulake, please continue reading.
The Zubulake decisions in 2003 through 2004 shook the world of e-discovery.Litigators, law professors, and all kinds of pundits, tuned in and took notice: U.S. District Judge Shira Scheindlin, one of the most brilliant trial judges on the bench today, and unfortunately for UBS, an e-discovery expert threw the gavel at UBS on this one.Zubulake walked away from this case with close to $30 million and UBS was left with a deep hole and lots of sanctions.
But we are skipping ahead in our saga.The case started as a common gender discrimination suit brought by Zubulake against her former employer, UBS. Continue reading »
Citation: Peskoff v. Faber, 251 F.R.D. 59 (D.D.C. 2008)
Employee/Employer Implicated: Owner/Executive
e-Lesson Learned: Make all reasonable efforts to preserve relevant data for pending or reasonably anticipated litigation, and if you can’t, be prepared to explain why. This includes having a data management protocol in place for managing the routine maintenance and deletion of data, stopping automated maintenance mechanisms and hiring experts to handle the preservation of relevant data at first notice of potential litigation, and performing a thorough search of discoverable data on the first attempt.
e-Lessons Learned is proud to bring you our first Video e-Lesson Learned, presented by Brett Van Benthysen of Seton Hall University School of Law. Click on the embedded video below to begin playback, and check out the e-Lessons Learned article it was based on by clicking here.
Employee/Employer Implicated: Business owner, who happened to be a former employee of his adversary
e-Lesson Learned: Deleting electronic documents and using special software to wipe data from computer databases during litigation will land you in legal hot water. If an opponent asks to inspect your computer databases, fight the temptation to delete any relevant electronic documents that might be there.
Stand-up comic Chris Rock has a great comedic bit about how men in relationships should not cheat on their significant others “‘cause you gonna get caught.”Well, one thing I’ve learned in my E-Discovery blogging, and one thing that the defendant in this case could stand to learn, is that if you decide to use hard drive-cleaning software to erase discoverable information from your computer, “you gonna get caught.”And just like men who cheat, once you get caught erasing discoverable information, you are in for a world of hurt.
Citation: Proctor & Gamble Co. v. S.C. Johnson & Son, Inc., 2009 WL 440543 (E.D. Tex. Feb 19, 2009)
Employee/Employer Implicated: S.C. Johnson & Co. and its IT staff
e-Lesson Learned: Spending $200 to $600 for a software program that converts images of documents into searchable text files, and paying for the necessary labor, are costs that a corporation properly bears in carrying out a discovery request which is otherwise relevant.
When a party requests that hard-copy documents be converted into a searchable digital file, the benefits of streamlined discovery can lead a court to order that the opposing party comply and pay for the necessary software and labor. Only a clear showing of Zubulake cost-shifting factors, such as lack of a reasonable likelihood that the evidence sought will lead to the discovery of admissible evidence, or high costs relative to the stakes of the litigation, would militate shifting the cost of the document conversion to the requestor. As between two corporate giants with litigation war-chests, the court will most likely have no reason based on economics for cost-shifting.
Employee/Employer Implicated: Defendant Playmate (Miss December 1980), Playmate of the Year (1981), and Personal Website Operator
e-Lesson Learned: Federal Rule of Civil Procedure 34 governs the scope and procedure for the discovery of electronic documents. Even before the rule was specifically amended, the definition of “documents” is broad enough to encompass electronically stored documents. If Defendant had printed any emails relevant to the litigation, they would be discoverable, and therefore it is not a big jump to step back and include the original electronic format of the document within the scope of the discovery rules.
Prior to December 1, 2006, the Federal Rules of Civil Procedure did not include any reference to electronic documents or electronically stored data.However, when Playboy discovered that one of its Playmates was deleting relevant emails relating to a pending litigation, it sought to use the discovery procedures to forensically analyze the Playmate’s hard drive.Always an innovator, and on the cutting edge of electronic media exploration, Playboy lead the charge that ultimately resulted in countless electronic discovery cases and the 2006 amendments to the Federal Rules of Civil Procedure.
e-Lessons Learned is fast becoming the site of choice for employers, employees, judges, lawyers, and journalists who are interested in learning more about these areas without being intimidated by the complexity of the topic.In fact, organizations and event coordinators often feature e-Lessons Learned as their official e-discovery blog.To register e-Lessons Learned as the official blog of your organization or event, click here.
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Tagged as: Good Faith, Production of Data, Sanctions, Spoliation
