Category Archives: Spoliation

Spoliation Spoils the Broth at Toyota?

J0438712 This one is a little quirky because, based on my research, I'm somewhat uncomfortable with the plaintiff, however, it does well to illustrate how a case can become a P.R. nightmare even before the defendant files an answer.

In Biller v. Toyota Motor Corp., 2:09-cv-5429, U.S.
District Court, Central District of California (Los Angeles) (warning: link opens a 117-page pdf), plaintiff Biller (formerly an attorney for Toyota) asserts that defendant Toyota concealed and destroyed evidence critical to hundreds of rollover cases.  Toyota has motioned to seal the case, citing violation of attorney/client privilege.

Oh boy.  I hated these hypothetical questions in law school.  When may an attorney in a position of confidentiality, break privilege to expose wrongdoing?  What about his corporate duties?  Not easy to discern when attorney and manager are one-and-the-same.  It depends what jurisdiction you're in and which code must be followed.  We used to call it the "climb-the-ladder" obligation.  Bring your concerns to the appropriate executives and hope they'll do the right thing.  You also have to look to who is being damaged and the level and extent of that damage.

Who, exactly, may an attorney speak with when the very act of revealing information – even within the company itself and ostensibly for a proper purpose – may still violate privilege?

This is the kind of issue that could result in a treatise that goes on for page after page, but to distill it down to basics, attorneys are officers of the court first – not the client; their duty of loyalty is clear.  What's not so clear; when does a violation cross the threshold that allows the attorney to go outside of privilege?

We won't know more details about this for a while, but it's one to watch.  My immediate thoughts are, 1) Plaintiff had better have some convincing evidence to back up his claims and 2) Toyota had better hope he doesn't.

Two things are clear.  Even if the claims are proven false, Toyota is already the loser, and as sure as I'm sitting here, this will appear as a question on the California Bar exam in 2012 (just kidding; I assume my position on the Executive Committee in about 10 days, so I don't want anyone jumping to the conclusion that I would ever know what will be on the exams).

Case Got Your Tongue? Safe Harbor, Spoliation & Sanctions, Oh My!!!

Melting Pssssst!  See the attorney in the funny hat on the right?  She screwed up her e-discovery case!

A little housecleaning, if I may.  Some of you may have noticed that I didn't do this feature last month.  That's because, after reviewing all of the cases, I kept repeating the same word – Duh!  My assumption is that you, like I, have very little time to waste.

Last month's cases involved weak attorney arguments – made to cover for a mistake – that were tossed by a judge who was having none of it!  Summaries are available everywhere, but I'm looking for cases that either 1) tell us something we don't know, or 2) clarify something we do know.

KCH Services, Inc. v. Vanaire, Inc., 2009 U.S. Dist. LEXIS 62993 (W.D. Ky. July 21, 2009)

NOTICE THIS! – The issue is simple.  When is one sufficiently on notice of potential litigation?  Simple in principle, maybe, but think about it for a moment.  If you're a huge company, irate customers might be calling every day, threatening to sue.  Should you take every single one seriously and immediately issue a litigation hold letter?  In the instant case, the court ruled (in my opinion, correctly) that the person receiving the call had sufficient basis to deem the threat of litigation credible and serious and therefore, should have issued a hold in anticipation of same.

Arista Records LLC v., "Usenet II", 2009 U.S. Dist. LEXIS 55237 (S.D.N.Y. June 30, 2009)

HOW SAFE IS YOUR HARBOR? – I posed this question recently in my analysis of the new e-discovery California rule.  Here's an example of how you lose it.  Shenanigans!  Is that a legal term?  Oh well…

Spieker v. Quest Cherokee, LLC, “Spieker II”, 2009 U.S. Dist. LEXIS 62073 (D. Kan. July 21, 2009)

COST-SHIFTING TURNED INSIDE/OUT – I'll give this one points for originality, but again, the fact that your IT staff has no experience complying with an e-discovery subpoena is not going to get you any sympathy from the judge.  As far as the costs themselves, I wonder if a California judge might rule differently using our "Toshiba" standard?

In a future post, I will endeavor to address this question – if I don't have to waste too much time reading the "Duh!" cases…

State of the (e-Discovery) Union; The Sequel

Aspirin My prior post was the Reader's Digest version.  Now, get ready for the migraine version…

Gibson, Dunn & Crutcher LLP has released a comprehensive mid-year update on e-discovery.  This is simple, folks.  If the responsibility for e-discovery sits squarely on your shoulders – and if you take that responsibility seriously – you need to read this publication, no matter how long it takes or how painful it might be (I have some aspirin if you need it…it'll come into play when you read about the increase in sanctions…)

Case Got Your Tongue? Mirror, Mirror & Searching the Forest

J0440920 Another interesting collection of cases crossed my desk, recently.  I'm going to refrain from writing about the "wake-up call" case because it's being cited everywhere.  Besides, if anyone hasn't noticed yet, my entire blog is about that.  Furthermore, we already know about my issues with waking up

By coincidence, two of the cases involve mirror-images of disks; however, the issues in each are completely unrelated.  Also, we have another illustration of how, when rules aren't followed to the letter, one can destroy a criminal case.

Am. Family Mut. Ins. Co. v. Gustafson, 2009 WL
641297 (D.Colo. Mar. 10, 2009)

YOU GOT IT, I TAKE IT – Plaintiff requested that the court set the protocol for the inspection of the mirror-image of Defendant's hard drive.  The court obliged, and in doing so, provided what I think is an excellent guide for anyone undertaking this process.

Forest Laboratories, Inc. v. Caraco Pharm. Laboratories, Ltd., 2009 U.S. Dist. LEXIS 31555 (E.D. Mich. Apr. 14, 2009)

ZUBULAKE – There's only one way to describe this case; Zubulake Duty applies, except when it doesn't

I can't count how many times on this blog I've referred to how
exceptions to a rule may be more dangerous than the rule itself. 
Forest illustrates that point.  This falls under the "knew, or should
have known" category.  The court is saying that if Plaintiff knew, or
should have known that ESI might be relevant to a dispute in the
future, they should have sought to preserve it – for key employee documents only – contrary to existing
company policy.  A tall order.  Talk about hindsight!

State v. Dingman, 2009 Wash. App. LEXIS 550 (Wash. Ct. App. Mar. 10, 2009)

This case also involves mirror-images of hard drives.  It should serve as a cautionary tale to anyone on the prosecutorial side of the equasion.

The State seized Defendant's computers.  Defendant wanted mirror-images of his computers' hard drives in a certain format and the State refused to provide them in that format.  The court found this to be prejudicial to Defendant and a violation of his Constitutional rights.  Defendant's conviction was overturned.

Still think the 4th, 5th & 6th Amendments don't apply to e-Discovery?

I’m Good Enough, I’m Smart Enough & Doggonit, People Like Me…

Cute Sheep…and eventually, I’ll write an in-depth analysis of California AB 5 and contrast it with the Federal Rules.  But, take a look at this fine analysis from regarding how California will deal with Zubulake ‘accessible vs. inaccessible’ ESI and how it contrasts with the Federal rules.

Finished reading?  Great.  Now let me tell you why nothing in the analysis rattles me.  You should have been treating your ESI as accessible all along.  Here’s why:

The law is all about exceptions.  Everyone knows the general rule, but ultimately the facts dictate whether an exception is in order.  At Sony Pictures in 1997, we successfully fought off a request for ESI in a California court because we made the case that it was accessible, but at punitive cost because we’d long since retired that particular backup system and complying would have required a $250,000 outlay (there was no product like Index Engines around in 1997).

I had a very smart professor in law school.  His advice was to always assume the worst-case scenario, then work backwards.  It’s actually a very logical approach.  Yes, the flood may be that bad, yes, the stock market may fall that much and yes, your adversary may make a persuasive argument to the judge.

Be an actuary.  They look at everything as ‘cost vs. risk’.  Which will likely cost more, paying to protect or paying after the fact?  A young PC user asked me the other day, “Why do I need a firewall?  What are the chances that I will be the one that will be hacked?”  My answer was, “If you want to gamble, that’s your call, but here’s a short list of things that could happen if you’re the unlucky one.”

Gamble if you like; but be prepared to face the consequences.

Judges to e-Discovery Attorneys: ‘Too Bad, So Sad!’

j0386224“Courts Unsympathetic to Electronic Discovery Ignorance or

Those were the words glaring back at me from my January 2009 issue of Kroll Ontrack’s Case Law Update and E-Discovery News Practice Points section.  It goes on to state (emphasis added):

“This past year highlighted a major trend in cases concerning issues involving the exchange of electronically stored data: an increase in judicial unwillingness to display compassion or tolerance for negligent e-discovery blunders. Courts are increasingly imposing sanctions for discovery misconduct and for the failure to properly preserve and produce electronically stored information (ESI). In fact, of the approximately 138 reported electronic discovery opinions issued from Jan. 1, 2008 to Oct. 31, 2008, over half addressed court-ordered sanctions, data production, and preservation and spoliation issues. A rough breakdown of the issues involved in these cases is as follows:

–  25% of cases
addressed sanctions.

–  20% of cases
addressed various production considerations.

–  13% of cases
addressed preservation and spoliation issues.

–  12% of cases
addressed computer forensics protocols and experts.

–  11% of cases
addressed discoverability and admissibility issues.

–  7% of cases
addressed privilege considerations and waivers.

–  7% of cases
addressed various procedural issues.

–  6% of cases
addressed cost considerations.”

Roughly one in four cases involving e-discovery resulted in sanctions?  Stunning!  I’m going to assume that my readers don’t intend to commit misconduct, so let’s talk about ‘ignorance’.

j0386152Based on the conversations I’ve been having lately, a lot of attorneys don’t even know there’s a standard, yet.  Well, if you don’t, here it is:

Courts presume (expect) a level of competence in e-discovery.  Great.  How do they determine the level?  Unfortunately, that’s the slippery slope.  It’s being determined every day in courts throughout the nation.  The Court expects that if you don’t possess the knowledge, you’ll find someone who does, and if you fail to do so, you’re going to be liable.

Cases?  Where do I start?  “…willfulness is relevant to the severity of
sanctions imposed, but not to whether sanctions should be imposed.” (Italics added)  Barnett v. Simmons, 2008 WL 4853360 (Okla. Nov. 10, 2008)

This goes to the heart of why I created e-Discovery Insights in the first place.  Any reasonable person understands that when you have new rules, there’ll always be latitude for a time until everyone comes up to speed.  That time is over.  Long over.  The Judiciary is telling us that they’ve had enough and are starting to lose patience with parties who flout the rules, and – like it or not – in many cases they’re completely justified.

You do not want to be in front of a judge who has lost their patience.  Been there, done that.  We’ve already seen the monetary sanctions, but one of these days, an attorney is going to either be suspended or disbarred over an e-discovery foul-up.  Don’t be the first.

I Can’t Really go to Jail over this…Can I?

As sanctions mount for those who have run afoul of the new e-discovery rules, debate is raging about criminal liability.  To some, the threat is very real.  They recommend extreme caution.  To others, it’s nothing more than a scare tactic.  They say the threat of incurring criminal liability over an e-discovery issue is slim to none.

Who is right?

I’ve neglected to link articles from both sides of the debate.  The reason; it’s not my place to criticize the writers – they make very strong arguments, for and against.  It just so happens that, in my opinion, the answer is somewhere in between.  Perhaps the reason many people think that criminal liability
is unlikely to attach flows from the possibility that they’re not thinking broadly enough.  In other words, they’re not taking into account who might be ensnared in the e-discovery net.

ca. 1990s --- Cat Staring at Goldfish --- Image by © Aaron Horowitz/CORBIS

The logic works in reverse.  The higher up in the e-discovery food chain you are, the more likely you’ll be eaten.  The small fry aren’t likely to get themselves in trouble, barring egregious conduct of some sort.  The standard of what would rise to the level of a criminal act may be high – but the liability exists.  So, who should be looking over their shoulder?

The White House (possibly violating the Federal Records Act), A former Broadcom Corporation executive (accused of obstruction of justice) and former Credit Suisse First Boston investment banker Frank Quattrone (also accused of obstruction and witness tampering) who endured a four-year ordeal for encouraging his employees to essentially ‘clean up those files’.

And the lawyers?  Six of them were referred to the State Bar of California for possible ethical violations in the Qualcomm v. Broadcom case.  A crime?  No, but facing various penalties up to and including disbarment, my guess is it feels like a crime to them.

If you reviewed the links, you’ll note that I’m not necessarily
concerned with whether the principal was convicted of – or plead guilty to –
committing a crime.  It’s scary enough just reading what actually happened – or could happen.

We’ve all heard the term, “Ignorance of the law is no excuse.”  That rule-of-thumb applies to e-discovery also.  One can commit a crime without realizing it.

j0387725If you’re a tech, and the boss tells you to delete data – and you simply follow his orders – if he instructed you in order to hide wrongdoing, he’s likely to be in trouble, but what about you?  If the facts are as stated, probably not.  But what if your company has an ESI policy, your boss’ instruction violates that policy, you know this, but you do it anyway?  Did you just become an accomplice to a crime?  Will the common explanation, “I was just following orders” get you off the hook?

Obviously, we’re not taking a crash-course on criminal law today.  There are so many hypothetical scenarios that could occur, with so many different facts that it would be impossible – and irresponsible on my part – to attempt to tackle all of them in a blawg post.

What I endeavor to do is to impress upon you that a snap decision that didn’t make you think twice in the past could burn you in the future.  ESI for it’s own sake doesn’t normally make one think of crimes.  But now, we’ve entered a new arena.  The law is involved, and if data “goes missing” in this context, your adversary – or the court – may infer that something fishy is going on.

Is it worth the time, expense, stress, loss of reputation and threat of incarceration?  The outcome is beside the point.  Even if you’re exonerated, where do you go to get your lost time, money and reputation back?