It would be so nice if something made sense for a change!
- Alice, “Alice’s Adventures in Wonderland” by Lewis Carroll
What happens when, out of nowhere, the “other side” in a litigation matter wants electronic information during discovery not from you, but from a third-party who has worked directly with your company? Yikes! What about all that confidential information you provided them, never imagining that anyone else would have access to such electronic information? Alternatively, what if those third parties have purged their files and no longer have the requested information? Is there a duty to maintain electronic documentation which is out of your immediate control?
The issue was addressed by United States Magistrate Judge Paul W. Grimm in his decision Goodman v. Praxair Servs., Inc., 2009 WL 1955805 (D. Md. July 7, 2009), where the Plaintiff asked that consultants to Praxair Services turn over their electronic documents in discovery. The Plaintiff alleged that the Defendants violated their duty to preserve evidence when they failed to implement a litigation hold on the third party, resulting in a significant loss of data, including the contents of hard drives and emails relevant to the dispute at issue.
The Court found there was no duty to preserve third party evidence. Although Fed. R. Civ. P. 34(a) does provide that documents are considered to be under a party's control when that party has “the right, authority, or practical ability to obtain the documents from a non-party to the action,” the Court determined that Praxair did not have “the sufficient legal authority or the practical ability” to ensure the preservation of documents prepared by its third-party consultants or "any legal control" over those documents. Accordingly, the Court held that Praxair had no duty to preserve any of the documents prepared by the third-party consultants. Absent any duty to preserve evidence under a party’s control, there could be no finding that spoliation of evidence had occurred.
This is a holding that makes perfectly good sense. Alice would be delighted.