e-Discovery Docket Sheet

In an action brought under the Lanham Act, the plaintiffs alleged that defendant Haugen spread a voice-mail message to thousands of Amway distributors falsely declaring profits from the plaintiffs' products were used to support the Church of Satan. In assessing the impact of the Satanism rumors on its sales and market share, the plaintiffs hired experts to review market-share databases created by an unrelated third party. The defendants sought sanctions against the plaintiffs for failing to preserve and produce these databases ' even after receiving several discovery requests and production orders. In response, the plaintiffs contended the following: Its subscription contract did not allow it to download all of the third-party database information; its computer system could not handle the entire download; the data was unhelpful in assessing damages; the defendants refused the third party's offer to make the databases available for a fee; and the discovery-related orders were not violated. The district court found that the plaintiff failed to preserve data, granted the sanctions motion and dismissed the claim with prejudice. On appeal, the court reversed the ruling, finding it “impossible to conclude that [the plaintiffs] acted with the requisite culpability to justify the sanction of dismissal.” The court also noted that genuine issues of material fact existed as to whether the defendants were prejudiced by their lack of access to the databases. Procter & Gamble Co. v. Haugen, 427 F.3d 727 (10th Cir. 2005).

In a patent-infringement case, the plaintiff sought to exclude evidence based on the defendant's “hide the ball” discovery abuse. During discovery, the plaintiff had sought documents and data compilations, including documents contained on the defendant's Internet site, relating to testing for interoperability for the products at issue. The defendant had represented repeatedly that it was unaware of any such documents. One of the defendant's employees, however, revealed at a later deposition that pursuant to the defendant's document-destruction practices, paper documents were shredded and electronic documents were deleted that included interoperability contracts and test plans. Citing Zubulake v. Warburg, the court stated: “[the defendant] and its counsel are well aware that a party in litigation must suspend its routine document retention/destruction policy and establish a 'litigation hold' to ensure the preservation of relevant documents.” The court further declared it would not allow “lawyers or their clients to lay behind the log and disregard their discovery obligations.” As a result, the court stated it would issue an appropriate remedy for the defendant and its counsel after considering all the evidence. Tantivy Communications, Inc. v. Lucent Techs. Inc., 2005 WL 2860976 (E.D.Tex. Nov. 1, 2005).

The defendants appealed a denial of monetary sanctions for alleged discovery violations relating to a product-liability and breach-of-warranty lawsuit. In particular, the defendants claimed its document-review costs were increased by the plaintiff's delay and/or failure to provide electronic versions of damage-calculation documents. Although noting that the defendants were entitled to the discovery and that the plaintiff made the process “more difficult than it need be,” the district court declined to impose sanctions. The district court determined that expert discovery had been delayed at that time and that it was “unclear whether [the plaintiff] was deliberately obfuscating or merely stopped its discovery related expert activities because of the stay….” On appeal, the defendants argued that the district court was incorrect, as it never actually received the documents from the plaintiff. The appellate court noted that the only evidence supporting this contention was an affidavit from the defendants' damages expert. Absent further evidentiary support, the court found no clear error in the district court's denial of sanctions. Koken v. Black & Veatch Constr., Inc., 426 F.3d 39 (1st Cir. 2005).

Appellate Court Reverses
Dismissal for Failing to Preserve Database

In an action brought under the Lanham Act, the plaintiffs alleged that defendant Haugen spread a voice-mail message to thousands of Amway distributors falsely declaring profits from the plaintiffs' products were used to support the Church of Satan. In assessing the impact of the Satanism rumors on its sales and market share, the plaintiffs hired experts to review market-share databases created by an unrelated third party. The defendants sought sanctions against the plaintiffs for failing to preserve and produce these databases ' even after receiving several discovery requests and production orders. In response, the plaintiffs contended the following: Its subscription contract did not allow it to download all of the third-party database information; its computer system could not handle the entire download; the data was unhelpful in assessing damages; the defendants refused the third party's offer to make the databases available for a fee; and the discovery-related orders were not violated. The district court found that the plaintiff failed to preserve data, granted the sanctions motion and dismissed the claim with prejudice. On appeal, the court reversed the ruling, finding it “impossible to conclude that [the plaintiffs] acted with the requisite culpability to justify the sanction of dismissal.” The court also noted that genuine issues of material fact existed as to whether the defendants were prejudiced by their lack of access to the databases. Procter & Gamble Co. v. Haugen , 427 F.3d 727 (10th Cir. 2005).

In a patent-infringement case, the plaintiff sought to exclude evidence based on the defendant's “hide the ball” discovery abuse. During discovery, the plaintiff had sought documents and data compilations, including documents contained on the defendant's Internet site, relating to testing for interoperability for the products at issue. The defendant had represented repeatedly that it was unaware of any such documents. One of the defendant's employees, however, revealed at a later deposition that pursuant to the defendant's document-destruction practices, paper documents were shredded and electronic documents were deleted that included interoperability contracts and test plans. Citing Zubulake v. Warburg, the court stated: “[the defendant] and its counsel are well aware that a party in litigation must suspend its routine document retention/destruction policy and establish a 'litigation hold' to ensure the preservation of relevant documents.” The court further declared it would not allow “lawyers or their clients to lay behind the log and disregard their discovery obligations.” As a result, the court stated it would issue an appropriate remedy for the defendant and its counsel after considering all the evidence. Tantivy Communications, Inc. v. Lucent Techs. Inc., 2005 WL 2860976 (E.D.Tex. Nov. 1, 2005).

The defendants appealed a denial of monetary sanctions for alleged discovery violations relating to a product-liability and breach-of-warranty lawsuit. In particular, the defendants claimed its document-review costs were increased by the plaintiff's delay and/or failure to provide electronic versions of damage-calculation documents. Although noting that the defendants were entitled to the discovery and that the plaintiff made the process “more difficult than it need be,” the district court declined to impose sanctions. The district court determined that expert discovery had been delayed at that time and that it was “unclear whether [the plaintiff] was deliberately obfuscating or merely stopped its discovery related expert activities because of the stay….” On appeal, the defendants argued that the district court was incorrect, as it never actually received the documents from the plaintiff. The appellate court noted that the only evidence supporting this contention was an affidavit from the defendants' damages expert. Absent further evidentiary support, the court found no clear error in the district court's denial of sanctions. Koken v. Black & Veatch Constr., Inc. , 426 F.3d 39 (1st Cir. 2005).