e-Discovery Docket Sheet

In a case involving breach of fiduciary duty, fraud and misrepresentation, the plaintiff brought a motion for sanctions against defendants and their counsel for spoliation and late production of evidence. Despite notice of potential litigation, the defendants abandoned 10 computer workstations containing relevant information at a former office location. Defendants also failed to identify and produce in a timely fashion approximately 25 gigabytes of data stored on a server that was still in their possession, initially asserting to their own counsel that there were no electronic files to search. The court found that the defendants were grossly negligent in abandoning the workstations and 'at least negligent' in their representations to counsel regarding the absence of any files to be searched. The court also held that defense counsel had been grossly negligent in their failure to conduct an independent inquiry to verify the accuracy of those representations. Granting plaintiff's motion in part, the court declined to issue an adverse-inference instruction or preclude the defendants from making a summary-judgment motion, but awarded monetary sanctions and ordered the defendants and their counsel to bear the costs equally. Phoenix Four, Inc. v. Strategic Res. Corp., 2006 WL 1409413 (S.D.N.Y. May 23, 2006).

After receiving 301,539 pages of documents in response to 131 discovery requests, the plaintiff accused the defendant of engaging in 'dump truck' discovery tactics. The plaintiff asserted that the documents were not produced in the 'ordinary course of business,' citing e-mails that were separated from their attachments and pages that contained lines of 'gibberish.' The plaintiff sought to prohibit the defendant from using any documents not produced in their initial document disclosure or, alternatively, to compel defendants to supplement its initial production by: 1) identifying every document responsive to each of the plaintiff's requests; 2) organizing and labeling each responsive document to correspond to the categories of the plaintiff's requests; and 3) producing the 'native' or 'original' electronic documents identified as personal folder files (PST files). The court denied the plaintiff's motion for preclusion and refused to require the defendants to organize and label the documents produced as the plaintiffs had requested. The court also declined to order the defendants to produce e-mails in their native format, as the defendants would be unable to sort out privileged files. However, in partially granting the plaintiff's motion to compel, the court required the defendants to 'reproduce' the documents containing gibberish in a 'readable usable format.'

In this opinion, the court addressed plaintiff's motion to compel the production of certain documents that the defendants were withholding. While the defendants maintained that the documents were protected by attorney-client privilege, the plaintiff asserted that the documents were discoverable under the crime-fraud exception. The court considered evidence that the defendants had used their counsel to delay discovery and make false representations to the court, while failing to preserve relevant e-mail evidence. The court found these facts sufficient to support a prima facie showing that in camera review of the materials might establish whether the crime-fraud exception applied. The court also upheld the magistrate judge's adverse-inference sanction regarding deleted e-mails, and denounced the defendants' use of deceptive discovery tactics and willful disregard for court orders. Responding to the defendants' appeal of the magistrate's discovery order, the court observed that '[h]ad candid disclosures to the [m]agistrate [j]udge occurred, an appropriate order could have been tailored to deal with these issues and keep costs down. The huge costs now being complained of could have been minimized by timely compliance when the e-mails were more current.' The defendants were ordered to produce e-mails stored on backup tapes as the magistrate had previously instructed them to do. Wachtel v. Guardian Life Ins. Co., 2006 WL 1286189 (D.N.J. May 8, 2006).

In an insurance-coverage dispute, the plaintiff challenged the defendant's interpretation of a policy-exclusion clause and sought discovery of related claim and litigation files in the defendant's possession. The defendant resisted the discovery request, but conducted a preliminary electronic search of its 1.4 million claim and litigation files and identified 454 related claims. The judge articulated that the issue of whether or not to order discovery of the defendant's files was not a matter of 'relevance, but rather burdensomeness.' The judge ordered file sampling, instructing the defendant to randomly select and scan 25 of the 454 identified claims into an electronically searchable document. The court identified four specific search terms that the defendant should use in conducting an electronic search of the claims for responsiveness, and instructed the defendants to review documents containing those keywords and produce any non-privileged, responsive information to the plaintiff. The court retained the authority to demand further discovery and allocate costs after reviewing the information produced from the 25 files. J.C. Associates v. Fidelity & Guar. Ins. Co., 2006 WL 1445173 (D.D.C. May 25, 2006).

Court Awards Monetary Sanctions for
Late e-Evidence Production

In a case involving breach of fiduciary duty, fraud and misrepresentation, the plaintiff brought a motion for sanctions against defendants and their counsel for spoliation and late production of evidence. Despite notice of potential litigation, the defendants abandoned 10 computer workstations containing relevant information at a former office location. Defendants also failed to identify and produce in a timely fashion approximately 25 gigabytes of data stored on a server that was still in their possession, initially asserting to their own counsel that there were no electronic files to search. The court found that the defendants were grossly negligent in abandoning the workstations and 'at least negligent' in their representations to counsel regarding the absence of any files to be searched. The court also held that defense counsel had been grossly negligent in their failure to conduct an independent inquiry to verify the accuracy of those representations. Granting plaintiff's motion in part, the court declined to issue an adverse-inference instruction or preclude the defendants from making a summary-judgment motion, but awarded monetary sanctions and ordered the defendants and their counsel to bear the costs equally. Phoenix Four, Inc. v. Strategic Res. Corp., 2006 WL 1409413 (S.D.N.Y. May 23, 2006).

After receiving 301,539 pages of documents in response to 131 discovery requests, the plaintiff accused the defendant of engaging in 'dump truck' discovery tactics. The plaintiff asserted that the documents were not produced in the 'ordinary course of business,' citing e-mails that were separated from their attachments and pages that contained lines of 'gibberish.' The plaintiff sought to prohibit the defendant from using any documents not produced in their initial document disclosure or, alternatively, to compel defendants to supplement its initial production by: 1) identifying every document responsive to each of the plaintiff's requests; 2) organizing and labeling each responsive document to correspond to the categories of the plaintiff's requests; and 3) producing the 'native' or 'original' electronic documents identified as personal folder files (PST files). The court denied the plaintiff's motion for preclusion and refused to require the defendants to organize and label the documents produced as the plaintiffs had requested. The court also declined to order the defendants to produce e-mails in their native format, as the defendants would be unable to sort out privileged files. However, in partially granting the plaintiff's motion to compel, the court required the defendants to 'reproduce' the documents containing gibberish in a 'readable usable format.'

In this opinion, the court addressed plaintiff's motion to compel the production of certain documents that the defendants were withholding. While the defendants maintained that the documents were protected by attorney-client privilege, the plaintiff asserted that the documents were discoverable under the crime-fraud exception. The court considered evidence that the defendants had used their counsel to delay discovery and make false representations to the court, while failing to preserve relevant e-mail evidence. The court found these facts sufficient to support a prima facie showing that in camera review of the materials might establish whether the crime-fraud exception applied. The court also upheld the magistrate judge's adverse-inference sanction regarding deleted e-mails, and denounced the defendants' use of deceptive discovery tactics and willful disregard for court orders. Responding to the defendants' appeal of the magistrate's discovery order, the court observed that '[h]ad candid disclosures to the [m]agistrate [j]udge occurred, an appropriate order could have been tailored to deal with these issues and keep costs down. The huge costs now being complained of could have been minimized by timely compliance when the e-mails were more current.' The defendants were ordered to produce e-mails stored on backup tapes as the magistrate had previously instructed them to do. Wachtel v. Guardian Life Ins. Co., 2006 WL 1286189 (D.N.J. May 8, 2006).

In an insurance-coverage dispute, the plaintiff challenged the defendant's interpretation of a policy-exclusion clause and sought discovery of related claim and litigation files in the defendant's possession. The defendant resisted the discovery request, but conducted a preliminary electronic search of its 1.4 million claim and litigation files and identified 454 related claims. The judge articulated that the issue of whether or not to order discovery of the defendant's files was not a matter of 'relevance, but rather burdensomeness.' The judge ordered file sampling, instructing the defendant to randomly select and scan 25 of the 454 identified claims into an electronically searchable document. The court identified four specific search terms that the defendant should use in conducting an electronic search of the claims for responsiveness, and instructed the defendants to review documents containing those keywords and produce any non-privileged, responsive information to the plaintiff. The court retained the authority to demand further discovery and allocate costs after reviewing the information produced from the 25 files. J.C. Associates v. Fidelity & Guar. Ins. Co., 2006 WL 1445173 (D.D.C. May 25, 2006).