What the World Was Searching for in 2007?

Google’s Zeitgeist 2007 provides a glimpse into what the world was searching for in 2007, at least those using Google, which these days means pretty much everyone. The results provide an important glimpse into evolving world culture and language.

Language and popculture are essential subjects for any e-discovery professional called upon to search for evidence. That’s because an effective searcher must know the linguistic patterns, slang, and popular references used by many different kinds of people. All keyword searches, and even concept searches, depend on that.  If you do not know the language and overall cultural mind-set of the custodians whose records you search, you may not run the right search. Even when you do, you may still fail to recognize a relevant “hit” during your review. You may read an email and misunderstand entirely what was said. You may not grasp that “bad” sometimes means “good,” or that badoo is one of the world’s fastest growing online communities. You may see a smoking gun and not even know it.

That is why, in my opinion, an effective searcher must be familiar with popular culture, especially in searches of email and instant messages. That is also grounds for caution in outsourcing large volume reviews. They may speak King’s English, but do they understand the ever-changing nomenclature of American culture?

As most everyone knows, Google saves every search ever made, but supposedly does not track who made what search. This kind of information is power, and not only allows for effective targeted marketing, but also for interesting sociological studies. Every year, Google provides us with their year end analysis of the searches made in the past year. Here is Google’s explanation of its yearly Zeitgeist:

To get a glimpse of what’s been on our collective consciousness, we mined billions of search queries to discover what sorts of things rose to the top. We encourage you to check out our findings to see if you, too, reflect the zeitgeist – the spirit of the times.

It is well worth your time to study these results yourself; but in the meantime, this blog will provide a few lists that I found interesting. I did a similar blog last year on the top Google searches in 2006 that you might also want to check out for comparison. Note that these lists only reveal what search terms are the “fastest gainers,” which appears to be a kind of extrapolation to show trends where more recent results are more heavily weighted, and very common terms are ignored altogether. In Google’s words:

Rather than showing the most popular searches overall, which would always be generic terms like “weather,” Hot Trends highlights searches that have sudden surges in popularity. Our algorithm analyzes millions of web searches performed on Google and displays those searches that deviate the most from their historic traffic pattern. The algorithm also filters out spam and removes inappropriate material.

With that explanation, here is Google’s report of the ”fastest rising” search terms overall in 2007 in the United States. As a courtesy to those who, like me, struggle to stay current with predominantly youth-culture trends, I also provide a brief explanation for each.

1. iPhone: iPhone, the Apple mobile phone with music and video player and web browsing features tops the Google top searches 2007 list.
2. Webkinz: Webkinz is a stuffed animal that customers can register and play with online.
3. TMZ: A Telepictures and America Online joint venture that provides focuses on the latest celebrity scandals.
4. Transformer toys: Transformers are flexible toys that shift shape, and became popular, once again, from the 2007 hit movie Transformers.
5. YouTube: online video-sharing site.
6. Club Penguin: Networking site for children.
7. MySpace: Social networking site.
8. Heroes: Heroes is an American science fiction serial drama television series created by Tim Kring on NBC.
9. Facebook: Social/business networking site.
10. Anna Nicole Smith: Anna Nicole Smith was an American sex symbol, model, actress, and celebrity.

The fastest rising search terms worldwide differed slightly from the U.S. list above. For instance, the entire world was not as obsessed with Anna Nicole as we were, and she did not make the top ten. Instead, good old badoo did. Here is the top ten global list:

1. iPhone.
2. Badoo: Although just started in 2006, this online community already has over 12 million members.
3. Facebook.
4. Dailymotion: Another video-sharing site with a more global focus.
5. Webkinz.
6. Youtube.
7. eBuddy: Instant messaging for web and phone.
8. Second Life: Virtual reality community where people interact online with avatars. The interactions can be random social or well planned, including virtual lectures. For instance, prominent Circuit Court of Appeals Judge Richard A. Posner (shown right) gave a lecture on December 7, 2007, where he discussed his latest book, Not a Suicide Pact, his defense of the Patriot Act, copyright, and other topics. He also answered questions from fellow avatars, many of whom were lawyers, some appearing as animals. Click here for a full transcript. Unfortunately, his event ended with a virtual terrorist bombing. No avatars were injured, and Judge Posner escaped safely into the real world. Second Life has its own money and market place with $millions in real-world transactions taking place every month. You can buy virtual real estate from the owner of Second Life, Linden Research. You can then create your own worlds and sell things, both real and virtual, including cars and computers. Many businesses large and small are already well established in Second Life, including IBM, where over 3,000 of its employees have avatar identities. There are even a few law firms there, but the word is, virtually no billable hours originate there.
9. Hi5: Online networking site with an international orientation.
10. Club Penguin.

On a global level, the most popular searches in 2007 on “Google News,” include, in my opinion at least, only one bona fide “news” item, and no, I don’t mean Paris Hilton:

1. American Idol
2. Youtube
3. Britney Spears
4. 2007 Cricket World Cup
5. Chris Benoit
6. iPhone
7. Anna Nicole Smith
8. Paris Hilton
9. Iran
10. Vanessa Hudgens

Google even ranks the top ten searched “law suits” which are:

1. Borat lawsuit
2. Vonage lawsuit
3, iPhone lawsuit
4. Facebook lawsuit
5. Jamie Gold lawsuit
6. Pants lawsuit
7. McDonalds lawsuit
8. Paxil lawsuit
9. RIAA lawsuit
10. Dell lawsuit

To be honest, although I know and like Borat, I had no idea he was involved in a lawsuit; in fact, I had never heard of most of these alleged law suits. As it turns out, a number of people who were duped into appearing in the movie Borat reacted by filing suit, including the villagers in Romania who were tricked into playing the Kazakhatans and sued for $30 million. Apparently people find these kind of lawsuits very amusing, confirming the old saying that “litigation” is a popular American observer sport. See: Kregos v. Associated Press, 795 F.Supp. 1325 (SD NY 1992) (“In bygone days, baseball reigned as America’s favorite pastime. Sadly, this honor seems to now belong to lawsuits. We see it on every front, on the front pages of newspapers, over cable television’s airwaves, and in the public discourse.”).

Another interesting thing you can do using Google Trends Lab is determine the locations in the world or U.S. where searches you specify have most often been performed. For instance, I searched the terms “electronic discovery” and Google Trends tells me the top ten U.S. Cities in which this search was performed and provides a graphic representation on volume as follows:

1.	Washington, DC, USA
2.	Houston, TX, USA
3.	New York, NY, USA
4.	San Francisco, CA, USA
5.	Boston, MA, USA
6.	Minneapolis, MN, USA
7.	Chicago, IL, USA
8.	Philadelphia, PA, USA
9.	Seattle, WA, USA
10.	Atlanta, GA, USA

Now you know why there are so many e-discovery vendor offices in Washington D.C. By the way, if you change the searched term to “e-discovery” you get a slightly different result where Toronto is 8th and Los Angeles is 9th. I reported on this same search in 2006 with essentially the same results, but the overall volume of these searches is way up.

In this same blog of a year ago, I reported the curious anomaly that ”Yahoo” had just replaced “Sex” as the most popular search term on Google. I also reported the top countries in the world who searched “sex” on Google. I ran this same search again today, and the results have changed significantly. For instance, last year Pakistan was number one; now it does not even make the top ten.

1.	Egypt
2.	Viet Nam
3.	India
4.	Turkey
5.	Poland
6.	Denmark
7.	Belgium
8.	Netherlands
9.	Switzerland
10.	Australia

I’ll let readers decide for themselves what message, if any, the above list provides on world culture, and what trend the change in rankings from 2006 might reveal.

Happy New Year!

Best Buy Wins Key e-Discovery Ruling in Fraud Case

Oh what a tangled web we weave, When first we practise to deceive!
Sir Walter Scott – 1808

In a pair of fraud cases, Best Buy turned aside allegations that its e-discovery efforts were ”haphazardous,” and used Rule 26(b)(2)(B) to overturn a harsh ruling. Best Buy Stores, L.P. v. Developers Diversified Realty Corp., 2007 WL 4230806 (D. Minn., Nov. 29, 2007). The magistrate’s order in the Developers Diversified Realty (“DDR“) case, where Best Buy is suing its landlords for fraud, required Best Buy to produce a vast database of electronic documents. Best Buy had prepared this database in another case where it was defending against claims of consumer fraud. The parties agreed that the cost to comply with the order would be $200,000, which was 25% of the total value of the case. The district court judge reversed the discovery order as clearly erroneous. The judge recognized that the order placed an undue burden upon Best Buy that was out of proportion to the size of the case or the importance of the documents sought.

In DDR, Best Buy alleges that seventeen of its landlords tried to defraud it by inflating the yearly insurance fees included in common area maintenance charges. In addition, Best Buy claims breach of contract and breach of fiduciary duty. It has amended the DDR complaint six times to try to make all of these claims stick. Even though the original complaint was filed on September 5, 2005, the Defendants have still not answered the complaint.

In addition to having the complaint dismissed multiple times, the landlord defendants were able to obtain a potentially “case settling” e-discovery order from Magistrate Judge Jeanne Graham on September 5, 2007. The order required Best Buy to search and produce information on leases and insurance from a database Best Buy had prepared for use in a totally unrelated consumer fraud case pending in Seattle, Washington. Odom v. Microsoft Corp. and Best Buy Co., D.C. No. CV-03-02976-MJP.

The database in question is huge! It consists of ESI from the shared drive for all documents in a department (the “V: drive”), and from the personal drives of all employees on the main system (“P: drive”). Best Buy Stores, L.P. v. Developers Diversified Realty Corp., at *5 FN. 2.  The database appears to have essentially all of Best Buy’s electronic documents that were stored outside its email systems. Best Buy supposedly spent $27,823 a month just for a vendor to store this database.

The parties in DDR all agreed that the database contained non-privileged ESI relevant to the landlord/tenant dispute, but this was not why the database was prepared. Best Buy prepared it to try to defend itself in Odom where it was accused of  defrauding consumers in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).  After two years, this putative class action complaint was dismissed with prejudice on March 16, 2004. Odom v. Microsoft Corp., 2004 WL 5407314 (W.D. Wash. 2004). The Seattle court did not think that Microsoft and Best Buy were Mafia-style racketeers within the meaning of the RICO Act.

Best Buy had thought that was the end of Odom, and so the database it created for the case was “downgraded” on July 27, 2006. DDR at *3. There is no clear explanation in the DDR opinion as to exactly what “downgraded” means, nor why Best Buy waited over two years to do it. This is puzzling, as Best Buy claims it costs $27,823 per month to store the database.

As to the definition of “downgraded,” it is only clear that the landlord defendants and Magistrate thought that the database was archived by an e-discovery vendor before it was destroyed. Best Buy disputes this, and contends the database was simply destroyed, but it could be recreated from backup tapes of the original sources, the “V” and “P” drives.

Ten months after Best Buy allegedly destroyed the database, the Ninth Circuit surprised Best Buy by reversing the dismissal and reinstating the complaint. Odom v. Microsoft Corp. and Best Buy Co., 486 F.3d 541 (9th Cir., May 4, 2007). The appeals court in an en banc decision held that Odom’s complaint adequately pled “associated in fact” and “enterprise” under RICO, and also that it pled wire fraud with sufficient particularity. The case was remanded back to the district court for trial. One would think this would cause Best Buy to restore the Odom database so that it could defend the allegations of consumer fraud. Apparently not, since Best Buy vigorously opposed the restoration of the database in DRR, and this point is nowhere mentioned in the DDR opinion.

After the Ninth Circuit reversal, the news for Best Buy went from bad to worse. Shortly after the case was reinstated, one of the key lawyers representing Best Buy in the state court version of the Odom class action suffered a nervous breakdown and admitted that he had fabricated evidence. According to an article by Matthew Hirsch, the Minnesota law firm, Burke & Thomas, moved to withdraw on May 24, 2007, upon its discovery that one of its partners, Timothy Block, ”had redacted and altered documents that he later produced to plaintiffs in this matter.” Mr. Block voluntarily reported his fraudulant actions to the state Bar, and took a medical leave of absence.

Plaintiffs’ counsel questions the veracity of this story. They seem inclined to blame Best Buy for the fraud, not their lawyers. They point out that they have had a motion for default sanctions pending against Best Buy for bad faith obstruction of discovery in the state court action since February 2007. To make matters worse, on October 15, 2007, the U.S. Supreme Court let the Ninth Circuit decision stand by refusing certiorari. Microsoft Corp. v. Odom, 128 S.Ct. 464, 76 USLW 3058, 76 USLW 3197, 76 USLW 3199 (U.S. Oct 15, 2007) (NO. 07-138).

Against this backdrop, on September 5, 2007, the Magistrate in DDR found that the Odom database was reasonably accessible, and ordered Best Buy to restore it from its “downgraded” condition, search it, and produce the relevant data. Magistrate Graham rejected Best Buy’s argument that the Odom database was protected from discovery under Rule 26(b)(2)(B). She did not consider the alleged cost of $124,000 to restore the database, and $27,823 per month thereafter to store it, to be a large enough cost to render the ESI stored on the Odom database ”not reasonably accessible” under Rule 26(b)(2)(B). Yet the total amount at issue was $800,000. Assuming it would take at least three months to search this massive database, this one discovery request by the defendants would cost the plaintiff over $200,000. That is 25% of the total amount at issue. This is a textbook example of an undue burden and expense under Rule 26(b)(2)(C).

The District Court Judge found the Magistrate’s ruling to be “clearly erroneous” and reversed the decision. Judge Doty held that the high cost to restore and house the Odom database rendered it “not reasonably accessible” under Rule 26(b)(2)(B) and (C). Although exactly what was involved in the downgrading of the Odom database was disputed, apparently the landlord defendants did not contest the costs of restoration and storage. Instead, they focused their allegations and argument on the alleged incompetence of the Best Buy internal e-discovery team, seeking to blame them for the poorly timed downgrading and resultant high costs to restore, search and produce. In the words of Judge Doty:

The focus of defendants’ arguments, both in response to Best Buy’s objection and in their own generalized objections, is that Best Buy haphazardly conducted electronic discovery. Specifically, defendants note concern about the lack of involvement from Best Buy’s information technology department to aid in the collection of ESI, the search practices of Best Buy’s property management department, Best Buy’s failure to preserve and search documents related to departed employees and Best Buy’s alleged failure to adequately search e-mail archives. Defendants, however, have failed to connect any of these concerns with the specific discovery ordered by the magistrate judge.

This “blame it on the Geek Squad” strategy proved to be a mistake. Judge Doty did not focus on the cause of the relative inaccessibility of the Odom database. He focused instead on the high cost and the failure of defendants to demonstrate a substantial benefit from such expensive discovery. The court was persuaded by Best Buy that the relevant information on leases and insurance contained in the Odom database was likely also to be found among the paper records, thus there was no need for restoration. In the words of the Court:

Defendants argue that the Odom database will contain materials responsive to the discovery ordered by the magistrate judge because Best Buy has yet to search for such materials. However, defendants do not argue that these materials are uniquely available from the Odom database or that Best Buy could not more easily obtain the materials from another source. Indeed, the ordered discovery likely exists in hard copy format, and any relevant ESI could be gathered manually without the need for restoration of the Odom database. 

The Court engaged in a formal 26(b)(2)(B) analysis of the discovery dispute, following the wording of the Rule. As mentioned, to begin the analysis, the district court judge reversed the magistrate’s holding that the Odom database was reasonably accessible. The primary basis for the “clearly erroneous” reversal was the cost, and that the database “would have to be restored from original sources.” DDR at *3.  The meaning of the “restoration from original sources” point was not explained.

The landlord defendants argued that this analysis was flawed because the Odom database was easily searchable before it was “downgraded” on July 27, 2006. Defendants claim that since Best Buy filed the DDR suit in 2005, it was clearly under a duty to preserve the database a year later. Defendants argued that even though the database was created for another case, Best Buy should have known that it contained ESI relevant to this case. Thus, Best Buy had a duty to preserve it. The defendants argued that Best Buy violated its duty when it downgraded the Odom database, and should not be rewarded for this spoliation.

The District Court agreed with defendants that Best Buy should have known that the defendants in DDR would seek information in the database because it contained relevant information. But as Judge Doty pointed out, the Odom database was so extensive that it would have information relevant to any lawsuit involving Best Buy. Since there were no specific discovery requests pending against the Odom database until March 21, 2007, Best Buy did not have an obligation to keep paying over $27,000 per month to store it. As the Court explains:

Because of the vast quantity of information in the Odom database, Best Buy should have been on notice that defendants would seek discovery of some of that information. The database, however, would have been potentially relevant to virtually any litigation involving Best Buy because of the quantity and nature of the information it contained. Absent specific discovery requests or additional facts suggesting that the database was of particular relevance to this litigation, FN3 the court determines that Best Buy did not have an obligation to maintain the Odom database at a monthly cost of over $27,000. Moreover, by downgrading the database, Best Buy did not destroy the information it contained but rather removed it from a searchable format. Therefore, Best Buy did not have a duty to preserve the Odom database as of July 27, 2006, and it need not restore the information to searchable format unless defendants establish good cause.

The Court then considered the good cause exception of Rule 26(b)(2)(B) wherein a court may still compel production of not-reasonably-accessible ESI if “the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C).” Rule 26(b)(2)(B).  Rule 26(b)(2)(C) limits otherwise permissible discovery if the court determines that:

(i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.

Since the Court was persuaded that the leasing and insurance information was probably obtainable from sources other than the Odom database, and since the costs to restore the database were so high, the Court concluded that the landlord defendants had not established good cause. For these reasons, the Court sustained Best Buy’s objections to the magistrate’s order and held that it did not have to restore the Odom database.

Pragmatically, this ruling rescued Best Buy. The Magistrate’s earlier ruling would have forced Best Buy into a cheap settlement of its case against its landlords. It was unlikely Best Buy would have been willing to pay 25% of the total amount at issue for an unrecoverable cost just to respond to one of many discovery requests.

Who’s On First? – New Case Repeats the Classic Miscommunications Between Law and IT

The ”Who’s on First?” word play by Bud Abbot and Lou Costello captures the core problem of e-discovery today.  In this famous comedic example of miscommunication, the tall Abbot says one thing, and the portly Costello hears another. (Abbot and Costello supposedly rarely did this joke the same way twice, but here is one good example of it.) No matter how they played this skit, the resulting confusion was always hilarious. Unfortunately, when this kind of miscommunication happens in the world of e-discovery, and I contend it happens every day in a thousand different ways, the results can be sanctionable. The recent case of Great American Ins. Co. v. Lowry Development, 2007 WL 4268776 (November 30, 2007, S.D.Miss.) provides us with the latest example.

You know, strange as it may seem, they give computer parts peculiar names nowadays. On a personal computer, we have memory, hard drives, files, and even a motherboard. All of these names were used frequently in Great American, although based on the opinion, not always correctly. The plaintiff insurer moved for sanctions against one of the defendants, the insured’s insurance broker, Danny Groves. Groves disposed of his personal computer after suit was filed when he had a duty to preserve all relevant information. He disposed of his PC after it was damaged by a lightning strike! Since I live in the lightning capital of the U.S., I happen to know a lot about what lightning can do to a computer, and none of it is good.

The parties all agreed that Groves’ computer was hit by lightning, but, aside from that, all of the other facts surrounding the destruction of his PC were disputed. So much so, that the Senior District Court Judge in Mississippi trying to sort this all out, L. T. Senter, Jr., required an evidentiary hearing.

After the hearing, where Groves and others testified, Judge Senter was persuaded that sanctions should be imposed against Groves because his disposal of the PC made it impossible for the insurer, Great American, to get documents from computer memory, documents that could have been relevant. Yes, you heard right – the computer memory. Groves argued there was nothing of value in his computer anyway, and so sanctions were not appropriate. To this retort, all the insurer could do was make speculative arguments that two documents might have been in Groves’ computer, since they could not be found anywhere else, and admittedly might not even exist. But if these two documents did exist, the insurer was convinced they would probably support its position that the policy did not cover wind damage, and so they did not have to pay for damages caused by Hurricane Katrina. Here is how Senior Judge Senter. Jr. explains it:

Other than these two documents, Great American has not specifically identified any relevant document that is missing from this record, but it is Groves’s disposal of his computer, the very act at issue, that deprives Great American of the ability to specify the documents in the computer memory that may have been relevant to the issues in this case. Whatever information the computer contained is now permanently unavailable.

Of course, the documents in the computer memory, assuming there were any, were permanently unavailable the minute Groves turned his computer off for the night, not to mention when it was struck by lightning. Computer memory, which is generally understood to mean RAM memory unless otherwise specified, is inherently ephemeral, and only exists in the memory chips as long as they have power. The instant a computer is powered down, the data stored in memory is lost. This was explained in some detail in my prior blog on the Columbia Pictures case, which concerned the discovery of the contents of memory before a computer is turned off or the data in computer memory is otherwise overwritten.

How did the judge in Mississippi get as mad as Costello at the end of the ‘Who’s on First?” routine? Well, perhaps not that mad, but upset enough to impose sanctions to support the insurer’s “mutual mistake” argument. This “mutual mistake” argument is quite creative and bears some explanation.  The insurer contends that it should not have to pay damages caused by Hurricane Katrina because when the policy was purchased, neither party thought that the policy covered wind damage, even if the courts in Mississippi now say it does.  Since both parties were mistaken, the contract is voidable by the insurer. It is a novel defense, one I have made myself a few times, but I cannot recall that it has ever succeeded.  Moreover, I would consider it a very long shot in these circumstances, where a jury in Mississippi must be convinced to side with an insurance company trying to avoid payment of a Hurricane Katrina claim.

But back to the circumstances in this case which agitated the judge enough to sanction Groves. It all started when Groves testified in his first deposition that his computer, the one he used in connection with the purchase of the insurance policy at issue, had been struck by lightning, and so he had no documents to produce. Groves testified that:

Took it in, he couldn’t fix it. He kept it. I don’t know what he did with it. I bought a new one from Dell, and that’s what I have.

The insurer followed up on this deposition testimony by requesting inspection of Groves’ “electronic files.” Groves’ attorney, who presumably was sitting next to Groves when he testified at the deposition, wrote an objection to the request where he stated:

… the only computer that contained such files and/or data was damaged by lightning in the summer of 2006. This computer was thereafter examined by Tech Advanced Computers and determined to be inoperable, and the files and data contained were not retrievable or capable of restoration. This motherboard of the computer was therefore replaced and the old motherboard discarded and is no longer in Groves’s possession.

So, the motherboard was fried by the lightning strike – no surprise there. But was the hard drive also zapped? Cannot tell from this answer, but you can tell that the motherboard was replaced and the old motherboard was discarded. Didn’t Groves just testify that the tech could not fix the computer, so he had to buy a new one from Dell? Did the lawyer think motherboard was the same thing as a computer?

Naturally, the insurance lawyer responded to that objection by talking to the Tech Advanced Computer technician who worked on Grove’s computer, Shawn Cusolito, and persuaded Cusolito to sign an affidavit. The way these things usually work is, the lawyer interviews the witness, and then the lawyer prepares an affidavit for them to sign, using language as favorable as possible for his or her client, in this case the Great American Insurance Company. Not too surprisingly, the tech’s affidavit contradicted both Groves’ testimony, and his attorney’s reponse to the production request. For some reason, Shawn Cusolito was not called to testify at the hearing, and the judge instead relied only on the affidavit, thereby depriving Groves of any chance of cross-examination of this witness. Here is how the Court summarized Cusolito’s affidavit statements:

… the technician reported that he was able to repair Groves’s computer by replacing its motherboard and that he returned the computer to Groves in good working order. Cusolito’s affidavit indicates that damage to the motherboard of this computer would not have caused a loss of any file or data stored in the computer.

I wonder how Cusolito knew that the lightning strike that fried the motherboard would not have caused any loss of data on the hard drive(s)? Did he run complete diagnostic tests on the hard drives to be sure no sectors were damaged? Did he even check that at all? Or did he just replace the motherboard, turn it on, and see that it booted ok? We’ll never know because all we have is his affidavit.

After the insurance company attorney got the Cusolito affidavit, he noticed Grove for a second deposition. This is unusual, but strangely there is no indication of any complaint by Grove or his attorney to a second deposition shortly after the first. At the second deposition, Grove was surprised by the affidavit and asked to explain the discrepancies with his prior testimony. Groves then admitted that his computer had been returned to him; in effect, the affidavit refreshed his memory about that. Still, Groves  testified that the computer malfunctioned again a few days later, and this time he just threw it away, rather than waste his time with another repair trip. Once again, to anyone with any experience with computers damaged by a lightning strike, this has a certain ring of truth to it. If portions of a hard drive were damaged, or perhaps other components, then even after the motherboard was replaced, the computer could very well stop working again, or work only sporadically, until it had to access damaged sectors of the drive.

Even though the judge never heard Cusolito testify, and never heard any other expert testimony, he did hear Groves testify, and based on this evidence, he held that Groves’ first deposition testimony was “untruthful” and Groves’ attorney’s response to the production request was “inaccurate and incomplete.” The Judge did not fault the attorney, however,  stating that “the attorney could only have relied on Groves for the information set out as grounds for this objection.” Not every judge would take such a forgiving attitude, especially in view of the ability to simply call Cusolito, like the insurer’s counsel later did, to inquire of the facts before signing his name to the pleading in conformity with Rules 11 and 26(g)(1), Federal Rules of Civil Procedure. (Rule 26(g)(1) states: “By signing, an attorney or party certifies that to the best of the person’s knowledge, information, and belief formed after a reasonable inquiry: (A) with respect to a disclosure, it is complete and correct as of the time it is made; …”)

Judge Senter was inclined to go easy on Groves too, since Groves had suffered a terrible personal tragedy a few months before the deposition. For that reason, the judge was inclined to believe Groves’:

… assertion that his misstatements were not the product of a deliberate intention to deceive but rather the product of his emotional distress and general inattention to his business affairs in the wake of his son’s death.

Still, even though he was inclined to believe Groves’ story of “inattention to business affairs,” which is another way of saying “negligence,” as a result of great personal distress, the judge held that Groves’ deposition testimony, contradicted as it was by the Cusolito affidavit, was “sufficient to infer the necessary element of bad faith in connection with his actions.”

For that reason, Judge Senter imposed spoliation sanctions against Groves for throwing away his old computer. He did so based on the assumption that the computer was in “good working order” as Cusolito’s affidavit said, and that this meant there there was still retrievable data on the computer that might have supported the insurance company’s mutual mistake argument against Groves. In explaining his decision, Judge Senter used the correct words this time, and did not refer to destruction of data in computer “memory,” but instead correctly referred to “hard drive.”

I am of the opinion that Great American has established, by clear and convincing evidence, that the destruction of this computer has deprived the parties and the Court of the benefit of any records that may have been contained in the computer hard drive. I am also of the opinion that the data stored on this computer, whatever it may have been, was relevant evidence that Groves was under a duty to preserve during the pendency of this litigation. Great American has also established that the destruction of this computer was not a result of simple negligence or any cause beyond the control of Groves.

It is hard to understand how the insurer was able to prove, and to do so by “clear and convincing evidence,” that the destruction was not the result of negligence, or of causes beyond Groves’ control, such as a lightning strike of his computer.

Still, the sanctions imposed were really not too harsh. Mississippi law apparently imposes a strict “clear and convincing evidence” standard to prove that a contract should be rescinded based on mutual mistake. That is no doubt why the judge found the spoliation evidence met such a high standard, when the typical “preponderance of the evidence” standard (51% or more) is all that is required to prove spoliation. 

The Mississippi mutual mistake recession law would require the Great American Insurance Company to prove by clear and convincing evidence that both it and the insured thought that the insurance policy did not cover wind damage at the time the policy was purchased.  One wonders why they purchased it? There may be a good answer to that, but still, this defense seldom, if ever, succeeds. Certainly it would be a very hard sell to any jury in Mississippi considering a Hurricane Katrina claim. With a clear and convincing standard, instead of the typical “preponderance of the evidence” standard, it would be a proverbial wild goose chase.

The sanction imposed here for the alleged spoliation was merely to reduce the insurer’s burden of proof from clear and convincing to preponderance. The court will also allow the insurer to present evidence to the jury as to the alleged destruction of evidence. At such time Groves could also present his own evidence on the issue, including, I would hope, expert testimony as to the impact of a lightning strike on a computer. Moreover, Groves could, for the first time, cross-examine the key witness against him, the repair technician, Shawn Cusolito.

I am reminded of a  well known line in the the Abbott and Costello movie “The Wistful Widow of Wagon Gap“:

That wild goose chase of yours is going to lay an egg!

It remains to be seen whether it will be rotten or golden.