More “Must Read” 2008 Cases – Part One in a Three Part Series

This is the first of a three-part blog, and a follow-up to an earlier essay, Online Reference and Thirty One More e-Discovery Cases. In this and the next two blogs, I will add thirty new case summaries and analysis in alphabetical order. This first blog covers the first ten cases, A-G, from the first half of 2008. It is already pretty long at 4,698 words, and one Monty Python video on spam, which is why I am breaking this up into three blogs of ten cases each. These are all cases that I consider “must read” e-discovery cases for 2008. Of course, if you want to “have a life” outside of e-discovery, you might just settle for reading these summaries, and then come back and read the full case later, if and when you need to.

These 30 new reviews are in addition to the twelve lengthy articles on 2008 cases that I have already posted:

1. Qualcomm v. Broadcom.
2. Johnson v. Wells Fargo Home Mortgage, Inc.
3. R & R Sails, Inc., d/b/a Hobie Cat Co. v. Insurance Company of the State of Pennsylvania.
4. Victor Stanley, Inc. v. Creative Pipe, Inc.
5. Texas v. City of Frisco.
6. Petcou v. C.H. Robinson Worldwide, Inc.
7. Bro-Tech Corp. v. Thermax, Inc.
8. Victory Intern. (USA) Inc. v. Perry Ellis Intern., Inc.
9. ICU Medical, Inc. v. RyMed Technologies, Inc.
10. Diabetes Centers of America, Inc. v. Healthpia America, Inc.
11. United States v. O’Keefe.
12. D’Onofrio v. SFX Sports Group, Inc.

The above twelve cases are, in my view, the most important decisions so far in 2008, but the 30 others I will review today, and over the next two weeks, are no slouches either. The truth is, there are tons of good e-discovery cases this year, including many more that did not quite make the cut here for one reason or another.

These new cases will help make the e-Discovery Team blog more useful as an online reference tool for students, fans, and practitioners of e-discovery. In the future, just use the Search button on the right to help you find or remember the e-discovery cases you need. In the meantime, reading these short reviews should help keep you up to date. As usual, unlike the excellent K&L Gates Blog, I interject my own opinions and analysis into most of these reviews. Again, these are my views, not that of my firm or clients. I do this with the hope that some analysis may help in your own processing, or at least keep the study of the law a tad more interesting, and maybe even sometimes amusing. After all, learning should be fun, especially for cutting edge stuff like this.

Special thanks to Catherine Jackson, an Editor of Florida Law Review, and Summer Associate at Akerman, for her fine help on this project.

Autotech Techs. Ltd. P’ship v. Automationdirect.com, Inc., 248 F.R.D. 556 (N.D. Ill. 2008). In a trademark infringement case, Defendant filed a motion to compel Plaintiff to produce a document titled EZTouch File Structure in native format with all metadata. Plaintiff argued that it had already produced the document electronically in PDF format and in paper format. Additionally, Plaintiff provided a “Document Modification History” representing a chronological list of all changes made since the document was created. The court denied Defendant’s request because Defendant had neither specifically asked for native format in its original document requests nor mentioned native format in any of its earlier motions. The court reasoned that “[Defendant] was the master of its production requests; it must be satisfied with what it asked for.”

The authority the opinion cites at page *560 to support this holding includes three cases, D’Onofrio v. SFX Sports Group, Inc., 247 F.R.D. 43, 48 (D.D.C.2008); Wyeth v. Impax Labs., Inc., No. Civ. A. 06-222-JJF, 248 F.R.D. 169, 170-72, 2006 WL 3091331, at *1-2 (D.Del.2006); Treppel v. Biovail Corp., 233 F.R.D. 363, 374 (S.D.N.Y.2006), and then my book:

See also Ralph C. Losey, E-Discovery, Current Trends and Cases 158-59 (2007) (summarizing recent cases as amounting to a “lesson … that in order to obtain metadata you may need, you should specifically ask for it to begin with”).

It would have been a must read case anyway, honest.

Baker v. Gerould, 2008 WL 850236 (W.D.N.Y. Mar. 27, 2008). Plaintiff, a state employee, brought an action against his employer for failing to promote him based on the fact that he had exercised his constitutional rights. Plaintiff filed a motion to compel the production of emails. Defendants produced some responsive emails, but Plaintiff renewed the motion to compel based on inadequate production. After oral argument on the motion, the court ordered Defendants to submit an affidavit delineating the steps they took to locate the emails.

The Defendants filed an affidavit, but it did not describe the steps taken to find the emails as the court had requested. Instead, the affidavit outlined the necessary steps to restore deleted data from backup sources. Plaintiff argued that the emails should be produced even if Defendants had to restore deleted data.

The court examined the elements of Rule 26(b)(2)(B) for production of inaccessible ESI, such as deleted emails, and then made the interesting holding that the rule should not apply unless and until you first try and obtain the ESI from all accessible sources. In this case, that would include PST email archive folders that employees may have made on their personal computers. The existence of such files is unknown, which is one reason the affidavit on search was ordered to begin with. If the missing emails were located in these easy to access PST files, there would be no need to consider searching deleted space and thus no need to follow the analysis of Rule 26(b)(2)(B). In the words of the court explaining the rule:

Under this framework, a court does not reach the two-fold question of whether inaccessible sources of electronically stored information should be searched and, if so, which party should bear the associated costs unless it is first satisfied that the request seeks relevant information that is not available from accessible sources. . . . This is because relevant considerations in determining whether to order a search of inaccessible sources include “the quantity of information available from other and more easily accessed sources” and “the likelihood of finding relevant information that seems likely to have existed but is no longer available on more easily accessed sources.” Id. See also Zubulake v. UBS Warburg LLC, 217 F.R.D. at 323 (one of the two most important considerations is “the availability of such information from other sources”).

Since the defendant did not provide the court with the affidavit it requested to allow the court to determine whether accessible sources of the email might exist, such as the mentioned PST files, the court held that it still did not have enough information to determine whether it should force the government defendants to search through their deleted files or not. The court was obviously persuaded that such an effort would be expensive and time consuming, and seemed completely forgiving of the fact that the state defendants had previously ignored her prior request for information by affidavit. The court denied plaintiff’s motion to compel, but without prejudice. The defendants were ordered to submit to depositions by the plaintiff as to their purported efforts to locate email. After such discovery, which the court assumes will provide information on the availability, or not, or accessible email, the plaintiff can return to the court for appropriate relief

City of Seattle v. Prof’l Basketball Club, LLC , 2008 WL 539809 (W.D. Wash. Feb. 25, 2008). In a case involving a dispute over a lease, plaintiff City of Seattle requested defendant Professional Basketball Club (the Seattle “Sonics”) to search and produce responsive emails of six of its eight owners. The Sonics had already produced about 150,000 emails from two of its owners, Clay Bennett, and Aubrey McClendon. (Who knew professional basketball management types wrote so many emails!) The Sonics objected to the additional requests because such a search would “increase the universe exponentially” and would generally produce irrelevant documents. Still, I have got to believe that the Sonics email is a lot more interesting to read, and certainly more colorful, than the email in your typical landlord/tenant case. That is especially true in this case where these new team owners fought a huge public battle, of which this case is a part, to move the team from Seattle to Oklahoma City.

The City apparently really wanted to see the email of the rest of the Sonics owners too, so it moved to compel production. The court granted the motion because the Sonics had control over the owners’ emails under Federal Rule of Civil Procedure 34(a), the emails were likely relevant to the claims, and there were no specific objections as required under Federal Rule of Civil Procedure 26(b)(2)(B). The court ordered the production of the emails because the Sonics had not adequately explained why the production was unduly burdensome. In the words of the court:

In opposing discovery on the grounds of overbreadth, a party has the burden “to provide sufficient detail in terms of time, money and procedure required to produce the requested documents.” Super Film, Inc. v. UCB Films, Inc., 219 F.R.D. 649, 651 (D.Kan.2004) (citation omitted). A “court must be able to ascertain what is being objected to. As such, unless it is obvious from the wording of the request itself that it is overbroad, vague, ambiguous or unduly burdensome, an objection simply stating so is not sufficiently specific.” Boeing Co. v. Agric. Ins. Co., 2007 U.S. Dist. LEXIS 90957, *8 (W.D. Wash. Dec. 11, 2007). A claim that answering discovery will require the objecting party to expend considerable time and effort to obtain the requested information is an insufficient factual basis for sustaining an objection. Roesberg v. Johns-Manville Corp., 85 F.R.D. 292, 296 (D.C.Pa.1980).

Here, PBC has not explained why producing the emails at issue would be unnecessarily burdensome, but merely states that producing such emails “would increase the email universe exponentially[.]” (Dkt. No. 14, Ex. C). PBC also states in its moving papers that the emails add “nothing to the case except mountains of work for no return.”(Dkt. No. 14 at 7.) But a bald assertion that discovery will be burdensome is insufficient in light of Fed.R.Civ.P. 26(b) (2)(B). The Court is not permitted to presume the potential burdensome effects upon a party. The parties have already agreed upon a group of search terms that PBC previously used to search Messrs. Bennett and McClendon’s emails and the Court assumes those terms may be used again to make further searches efficient.

The lesson of this case is that you cannot rely upon general objections buttressed by big numbers alone to persuade a court to protect you from burdensome discovery. You have to spell it out and provide details as to why it is so burdensome. Otherwise, even if you are the Sonics in your home court in Seattle, you may not be heard. And if you are new owners trying to take the team away, it might not matter anyway, but you should at least try

Clearone Communications v. Chiang, 2008 WL 704228 (D. Utah Mar. 10, 2008). Plaintiff filed a motion for sanctions in this case involving claims of misappropriation of trade secrets, breach of contract, and conversion. Plaintiff argued that sanctions were warranted because of Defendant’s misrepresentations concerning the late source code production and Defendant’s failure to produce “smoking gun” email, which was produced by another party to the litigation. The other party was the recipient of the “smoking gun” email. Defendant argued that its computer system did not retain copies of any sent emails.

The court allowed an adverse inference instruction and monetary sanctions based on the belated production of source code and the misrepresentations about the existence of other versions of the source code. The court did not grant sanctions based on the missing “smoking gun” email because the court reasoned that the automatic deletion of the email was not done in bad faith. Instead it was their usual policy, albeit an uncommon one. The court did, however, question the wisdom of a business not saving any of its sent email, but that was beside the point for sanction analysis. Here is the Court’ ruling:

For any business this is a significant irregularity; almost unimaginable for a technology company; and even more unlikely for a person of Bowers’ importance in such a company. Nonetheless, it does not appear that the September 5, 2005, email was withheld by WideBand Defendants-they did not have any copies of emails sent by Bowers.

WideBand Solutions, Inc., did not maintain an email storage system that would retain a copy of the September 5, 2005 email. No evidence suggests that this was done in bad faith, but is rather the effect of design of the email system WideBand employed. However questionable the design may be, the effect is that the routine operation of the WideBand computer system did not capture the email. No sanction is needed on this point, as ClearOne is free to establish at trial that no one has complete access to or knows the entire contents of Bowers’ sent email. Each party will be free at trial to argue the implications of that fact.

The court did not mention Rule 37(e), but this case is a good example of where the rule would apply. Here is the wording of the Rule:

Electronically stored information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.

That is exactly the situation the court describes in this case and so the refusal to impose sanctions here complies with the new rule.

Coburn v. PN II, Inc., 2008 WL 879746 (D. Nev. Mar. 28, 2008). In this employment discrimination action, Defendants sought to obtain a forensic examination of Plaintiff’s home computer. Defendants stated that the search would focus on information regarding Plaintiff’s employment with Defendants, the employment termination, Plaintiff’s claims, and possible damages. They offered to pay for the whole thing. Surprisingly, Plaintiff did not object to the forensic examination, but she wanted it to be a more “limited, focused” inspection. Plaintiff also opposed the request because she claimed Defendants did not set forth a protocol or methodology that would protect her against violations of privilege, privacy, and confidentiality interests.

The court did not really address Plaintiff’s scope concerns, but instead generally stated that the burden on Plaintiff was minimal, and noted that Defendants had agreed to pay for the imaging. The court cited Playboy Enterprises, Inc. v. Welles, 60 F.Supp.2d 1050, 1054-55 (S.D. Cal.1999), with approval as establishing a good protocol to protect confidentiality. The court then followed Playboy and set forth its own detailed procedures to protect Plaintiff’s privacy rights.

The case is interesting for the detailed protocols ordered. It is also unusual in that the inspection per se was unopposed. I expect many will gloss over this key fact, and try to use Coburn to argue for a right to inspect another’s computers, so long as privacy is protected, and the inspection is paid for. That is contrary to the law, where good cause or other unusual circumstances must be shown, such as discovery abuses, or evidence of missing ESI.

Daimler Truck N. Am. LLC v. Younessi, 2008 WL 2519845 (W.D. Wash. June 20, 2008). This case alleges breach of duty of loyalty and confidentiality based upon an employee’s leaving to go work for a competitor, and allegedly disclosing confidential information to the competitor. Defendant Ramin Younessi was a “high level executive” of plaintiff, Daimler Truck, before going to work for a competitor truck manufacturer. Daimler served a subpoena upon a truck dealer, Cascadia International LLC (“Cascadia”), who was not a party to this litigation. The subpoena requested production of Cascadia’s computers so that Daimler’s experts could search them for certain communications involving the alleged confidential information. Cascadia of course moved to quash the subpoena and for a protective order because the request was unduly burdensome and required disclosure of its trade secrets. No doubt you have already correctly deduced that Cascadia is not a Mercedes truck dealer.

The court did not entirely quash the subpoena because the requested communications were highly relevant. However, the court did not allow Daimler to inspect the computer hard drives because of the risk of disclosing trade secrets. The court ordered Cascadia to search its own computer systems and produce any relevant communications. In response to the objection that the search was unduly burdensome because of the many locations and computers involved, the court directed Cascadia to identify all sources that it did not search, and all potentially relevant documents that it did not produce, in order to evaluate the costs of providing the documents and likelihood of finding relevant documents. The court also limited the production to documents found on certain hard drives and other electronic devices.

Although the Court here reached the right result, the opinion is remarkable for it’s misunderstanding of the rules and the nature of ESI. Read this language of the decision and see if you can tell what is wrong.

The Federal Rules provide for discovery of electronically stored information either in its original state, i.e. actual production and copying of hard drives, or in a reasonably usable form, i.e. print outs. Fed.R.Civ.P. 34(a)(1)(A). . . . That is, the Rule allows for a subpoena of an entire hard drive for the limited purpose of finding a few documents which may be stored therein. See Fed.R.Civ.P. 34(a)(1)(A) (requesting party may obtain information stored in any medium); Fed.R.Civ.P. 34(b)(1)(C) (requesting party “may specify the form or forms in which electronically stored information is to be produced”). This would be analogous to allowing the search of a party’s entire collection of file drawers for the purpose of finding a single class of documents.

That is not what the rules mean at all. The rules allow for the request and production of relevant electronically stored information. ESI is not equivalent to hard drives. The original state of ESI is not hard drives. It is digital information. ESI is sometimes stored on hard drives. It lives there sometimes, it is it’s “house” so to speak. But it is not the same thing as the house itslef, anymore that I am. If you want to see the original of me (dubious desire) you do not subpoena my whole house and then go in there and look around for me. You subpoena me, and out I come. It is the same way for ESI. The original state of the ESI is not the same thing as the “hard drives” or other media in which it lives.

The ESI they were searching for in this case was computer files, most likely email. These files that can be stored on any device. When the original ESI is copied from one media to another, if it is done right, there is no alteration at all. It is still the same original ESI, it is just located on another medium. In that regard, ESI is just like a person. It is still the same person when he or she moves out of the house and into a car. It is also the same original ESI regardless of whether it is found on a hard drive, DVD, thumb drive, iPhone, or whatever.

It is obvious from the language that this fundamental nature of ESI has been misunderstood, and this misunderstanding then leads to needless machinations and worries about the rules. They are better written than that, and the revisions of December 1, 2006, do not, analogously speaking, turn common sense on its head and now allow a party to search another party, or worse, a third party’s “entire collection of file drawers for the purpose of finding a single class of documents.” People search their own drawers, thank you, just like they always have.

Ed Schmidt Pontiac-GMC Truck Inc. v. DaimlerChrysler Motors Co., LLC, 538 F. Supp. 2d 1032 (N.D. Ohio 2008). This is a case by an automobile dealer against its manufacturer, Daimler-Chrysler, alleging breach of a settlement agreement. The opinion addresses the dealer’s motion for leave to amend the complaint to add a new complaint under state law (Ohio) for spoliation. Plaintiff alleges that Daimler-Chrysler lost evidence by not instigating a proper litigation hold after the complaint was filed, and by intentionally destroying evidence by replacing employee computer hard drives only days before Plaintiff made forensic images of them. The court granted Plaintiff’s motion holding that Plaintiff presented sufficient evidence to allow the claim to be pled.

One of the arguments Daimler-Chrysler employed to try and defeat this motion was that arguments on this spoliation claim to the jury would be more prejudicial than an adverse inference instruction. The Court disagreed, and noted (correctly, I think) that such an instruction regarding destruction of evidence would also be extremely detrimental to the defense. Note that this maneuver, to add a new claim for spoliation, instead of just seeking sanctions for spoliation in the underlying claim, is not available in many states, such as Florida, that do not allow a separate tort for spoliation in these circumstances.

Ferron v. Search Cactus, LLC, 2008 WL 1902499 (S.D. Ohio Apr. 28, 2008). Plaintiff, John W. Ferron, is an attorney who brought an action for himself under the Ohio Consumer Sales Practices Act for unlawful, deceptive spam. Ferron claimed that the emails he received from Search Cactus were misleading and deceptive, in that they offered “free products” without adequately disclosing the conditions attached to claiming those purported “prizes.” The unsolicited emails Ferron received were the main evidentiary support for his claim.

Search Cactus requested an inspection of Ferron’s computer systems to determine whether the emails and website visits were a legitimate consumer transaction under the statute. They in effect argued a kind of entrapment, that Ferron induced poor Search Cactus into spamming him, and then sued them for it as a consumer violation. Apparently Ferron admitted to filing many such suits for himself, and for his clients; to which I say, what’s wrong with that? Many people dislike spam and everybody needs a hobby.

Search Cactus wanted to inspect Ferron’s computers to seek information it said would allow it to determine “whether Plaintiff’s opening of the emails and any attempts to obtain free merchandise were part of a business designed to profit from email litigation.” Search Cactus was looking for the Internet browsing history shown by the computers, as if this would somehow prove their point. The opinion does not explain this, or many other technical aspects.

This case is again unusual in that Ferron, an attorney, does not oppose the inspection, or at least, this battle has been previously fought and lost for reasons not explained in this opinion. Instead, Ferron seeks only to limit the forensic inspection to one small segment of his computers. He argues that the Internet browsing history is stored in only one directory (typically true), but for some reason, again not explained, does not simply produce this information. Search Cactus disagrees that the history is only in one location, and instead argues that complete images of the entire drives are necessary to find the browsing history. Apparently, Search Cactus suspected Ferron of hiding the history in other areas of the drives and of deleting it, or at least trying to.

The court allowed a full forensic examination, but provides only vague justifications, holding that the inspection of the computers was necessary because: (1) there was evidence that Ferron had failed to preserve relevant evidence (the opinion does not explain what was supposedly destroyed); (2) Ferron had not produced the relevant information (again, that is a mystery – finding and producing the history should be easy, and it is hard to understand why this was not done by Ferron long ago); and (3) Ferron’s computer system was the only place where the evidence requested was contained (well yes, but again, it could easily be copied and live on a production CD as well). The court recognized Ferron’s concerns regarding confidential and privileged information. For that reason, it issued a Playboy type protocol to protect Ferron’s rights during the computer inspections. No word on what protection he was offered against tricky spam.

Flagg v. City of Detroit, 2008 WL 787061 (E.D. Mich. Mar. 20, 2008). Detroit seems to be having more than its share of city employee text message problems. The sexual text messages and cover-up of the infamous Mayor of Detroit are well known. But the Flagg case, again involving text messages by city employees in Detroit, is not. Flagg concerns a more serious subject than a politician’s sex life, and the court established a detailed protocol for reviewing text messages between a large number of city officials.

The Plaintiff in Flagg is the minor son of a murder victim. The murder remains unsolved. Plaintiff alleges that the employees of the city did an incomplete investigation of the murder, and even intentionally ignored and concealed significant evidence. Plaintiff alleged that this negligence and willful misconduct resulted in Plaintiff not being able to bring a wrongful death lawsuit against the murderer.

In a previous order, the court denied Defendant’s motion to quash a subpoena given to SkyTel to produce text messages between city officials. The court found that the text messages might contain discoverable information, thus Plaintiff was allowed to pursue inspection of these messages. The order established a protocol where the PIN numbers of the text messaging devices of certain city officials were given to SkyTel to retrieve the messages. Two magistrate judges were assigned to oversee and control the receipt of the text messages from SkyTel, review the text messages, and determine if certain text messages are discoverable under Federal Rule of Civil Procedure 26(b)(1).

Grange Mutal Casualty Co. v. Mack, 2008 WL 744723 (6th Cir. March 17, 2008). This is a Sixth Circuit opinion affirming a default judgment entered as a sanction for a host of discovery abuses, both paper and electronic. Several insurance companies sued Greg Mack in District Court in Kentucky. Mack was an operator of medical clinics that specialized in the treatment of automobile accident victims. The insurer Plaintiffs sued Mack for fraud and Racketeer Influenced and Corrupt Organizations Act (RICO) violations. In the words of the Sixth Circuit, “Mack bilked the companies by setting up medical clinics to treat auto accident victims and then using those clinics to diagnose phony injuries and overcharge the companies for the needless medical services performed.”

The district court ordered a default judgment for liability and damages as a sanction for Mack’s many egregious discovery abuses, including a few e-discovery abuses, such as secretion and destruction of computers. Mack appealed to the Sixth Circuit, and not too surprisingly, in view of the incredible history of defiance and refusal to provide discovery, the default sanction was easily affirmed. The Court opinion recounts some of the most damning evidence against Mack, including testimony from one of his former attorneys. Here is an example from the opinion:

Although our court hesitates, but is not entirely unwilling, to approve a default judgment when any misconduct is solely the fault of the attorney, Harmon, 110 F.3d at 367-68, we need not hesitate here because Mack perpetrated the discovery abuse himself. Mack personally instructed Dr. Santelices not to produce numerous discoverable documents and personally fired Dr. Santelices when the doctor turned over a complete copy of his date book instead of the edited version that Mack initially turned over. Mack personally changed the office computers despite pending litigation, refused to turn over other computers, and issued blanket, frivolous objections to the Grange plaintiffs’ discovery requests. Prior courts have treated similar frivolous objections as evidence of willful conduct. Bank One, 916 F.2d at 1074-75.Furthermore, Mack’s former counsel, Robert Riley, admitted that important documents had been removed from his files. Documents do not jump out of file boxes on their own.

The final words of the Sixth Circuit in Grange are well put, and I predict will be quoted frequently by litigants seeking sanctions for discovery abuse:

Our civil legal system hinges on voluntary discovery. Discovery abusers must be sanctioned, because “[w]ithout adequate sanctions, the procedures for discovery would be ineffectual.” 8A Wright, Miller & Marcus, Federal Practice and Procedure § 2281 (2d ed. 1994). Judge Hood acted well within his discretion in ordering the default judgment. We affirm, both to punish Mack for his egregious conduct and to deter other litigants who might be tempted to make a mockery of the discovery process. See Nat’l Hockey League v. Metro. Hockey Club, 427 U.S. 639, 643, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976) (per curiam).