2008 E-Discovery Year In Review

It's that time of the year again .... chilly temperatures, frenzied shopping, offices full of high-calorie treats, and, my personal favorite, year-end "year in review" and "top" lists.  Kroll Ontrack contributes an interesting early entry to the annual roll with its descriptively-titled, "Year In Review: Courts Unsympathetic to Electronic Discovery Ignorance or Misconduct"

Kroll's sobering survey of the approximately 138 reported opinions on electronic discovery issue leaves something rather more ominous than visions of sugarplums dancing in one's head, revealing that over half of those opinions addressed sanctions, data production, or preservation and spoliation issues, with a whopping 25% involving some type of court-ordered sanctions for e-discovery issues.  Kroll also offers its "top five" 2008 cases demonstrating both the breadth of material available through e-discovery and courts' growing intolerance for e-discovery mishaps:

  • In Flagg v. City of Detroit, 2008 WL 3895470 (E.D. Mich. Aug. 22, 2008), U.S. District Judge Gerald Rosen rejected the city defendants' argument that the court's previous order - compelling the production of text messages sent between City employees on city-issued text messaging devices - violated the Stored Communications Act ("SCA").  Although the SCA does not authorize a service provider to disclose electronic communications in response to a subpoena or court order, Judge Rosen found that the law does not override a defendant's obligation under Federal Rule of Civil Procedure 34 to produce relevant, nonprivileged electronic communications in their possession, custody or control.  Rosen reasoned that defendants were both able and obligated to give their consent to SkyTel, the service provider that stored the text messages, to retrieve those messages, which the city must then produce. 
  • U.S Magistrate Judge Paul Grimm contributes once again to the body of e-discovery casleaw with Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D. Md. May 29, 2008), and sheds some light on the "reasonable precautions" parties must take to prevent inadvertent disclosure.  Judge Grimm found that defendants had waived the attorney-client and work product privileges as to 165 electronic documents inadvertently produced in discovery by failing to take several measures that could have prevented the waiver, including a clawback agreement the disclosing party voluntarily abandoned and compliance with The Sedona Conference® best practices.
  • The effectiveness of electronic search terms and methods may be a growing area for expert testimony in both civil and criminal cases, per United States v. O'Keefe, 2008 WL 449729 (D.D.C. Feb. 18, 2008).  Applying the civil e-discovery rules to a criminal prosecution, Magistrate Judge John M. Facciola ordered the parties to collaborate to reach an agreement on production after the co-defendant filed a motion to compel claiming the government failed to meet its discovery obligations.  Judge Facciola further suggested that any judicial review of search methods may demand the services of an expert witness, observing that lawyers and judges who attempt to determine whether search terms are effective venture "where angels fear to tread."
  • Another Judge Facciola decision makes Kroll's top-five list:  Peskoff v. Faber, 2008 WL 2649506 (D.D.C. July 7, 2008).  Peskoff involved an ongoing discovery dispute involving Faber's failure to produce certain emails without explaining why they were not produced or what efforts he had undertaken to locate them.  Finding that Faber's search had been inadequate, the court orderd the parties to seek bids from forensic computer technicians to determine whether the cost of searching for, restoring, and converting the emails from Faber's computers was justified.  Since the court found that defendant's inadequate search efforts, failure to preserve ESI, and overall unwillingness to take "discovery obligations seriously" had caused the need for forensic examination, the court refused to shift costs.
  • Last, but certainly not least, my personal favorite e-discovery cautionary tale of 2008 goes to Keithley v. Homestore.com, Inc., 2008 WL 3833384 (N.D.Cal. Aug. 12, 2008).  A "lackidasical attitude" towards e-discovery doesn't pay, as the defendant in patent infringement litigation learned when the court awarded plaintiffs their attorney fees, expert witness fees and costs that could total over $1 million for re-doing tasks made necessary by defendants’ misconduct and ordered a mandatory adverse inference jury instruction against defendants.  Why?  A litany of e-discovery misconduct that the court described as "among the most egregious this court has ever seen," including:  
    • a defendant employee who "suddenly remembered" after well over a year of discovery demands, court orders and sanctions hearings that he had stored a crashed hard drive that contained some of the source code sought at his home;
    • computerized reports that defendants claimed "did not exist" suddenly surfacing in a hard drive under a directory labeled "reports";
    • defendants' failure to remind technical personnel of the need to preserve crucial source code information, resulting in the loss of backup information when the backup tapes for a failed computer continued to be overwritten;
    • defendants failure to ask the person responsible for transferring files to a new source code control system about the availability of source code until after a sanctions hearing.

Fodder for some 2009 e-discovery resolutions, indeed!