Sometimes I feel like I spend a lot of time writing about the things people do that are incorrect in EDiscovery, but I realize that there is more information out there about what people do that is wrong than what is right.? It is generally not a story that most people follow the law and the rules of evidence, but it can be instructive to everyone when we highlight an error in judgment in an attempt to make it a learning moment.? And sometimes, the fact that someone has suffered some type of damage as a result of their action makes people pay attention to the issue.? Figuring out that the opposition has willfully withheld discoverable evidence is becoming an important part of obtaining ESI in today?s world.? No one wants to suffer a sanction that costs them or their client money.?
This week?s posting is about this type of action, but it has a twist based on the FRCP 37.
Generally, news about EDiscovery focuses on whether a court should approve a particular order to compel discovery in a case based on a set of circumstances.? The resolution of this request is usually the end of the argument and parties move into the discovery phase based on the court?s order.? In Multifeeder Tech, Inc. V. British Confectionery Co. Ltd. 2012 WL 4135848 (D. Minn. Sept. 18, 2012), the usual discovery issues have a different twist.
The Rule
Federal Rule of Civil Procedure (FRCP) 37 was written to outline the process of disclosure of discovery material and contains very detailed steps about the ramifications of failing to comply with the requirements (i.e., the order of the court).? Under FRCP 37, if a party fails to comply with an order to provide or permit discovery to move forward, the court may then issue further orders including: 1) holding the violator in contempt of court and 2) ordering the violator, the attorney advising the violator, or both to pay the reasonable expenses, including attorney?s fees, that were incurred as a result of failing to comply with the order.?
The Case
The real story of this case, which involves a breach of contract, started in 2010, when the plaintiff moved to compel discovery regarding a number of very specific document requests which were granted by the court.? Usually, that is the end of the discovery dispute and the party complies with the judicial ruling.? Six months later, the plaintiff submitted further motions to the court requesting sanctions due to the defendant?s failure to comply with the order of the court.
The magistrate judge overseeing the case granted the defendant?s order for sanctions, but stayed the sanction, in an attempt to get the parties to cooperate and come to an agreement about the EDiscovery.? If the parties could not reach agreement, then each side would submit individual proposals that the court would use to create a protocol.? When the parties could not reach a mutual agreement, the court selected the plaintiff?s proposal and appointed a computer forensic expert to search and image the defendant?s computers, with costs allocated between the two parties.
The forensic examiner presented its findings to the court, including the following three major observations:
??Commercial wiping software programs were found on key custodian?s computers
??At least six incidents of deletions occurred after the discovery protocol was ordered by the court
??Encrypted data was found on a vice presidents laptop computer that had not been revealed by the individual and was therefore considered wrongfully concealed.?
The Findings
As a result of these findings, the magistrate judge recommended that the defendant be held in contempt and required to pay $500,000 in monetary sanctions.? Part of those sanctions was to cover the forensic examiners fees.? Additionally, there would an adverse inference instruction at trial. Neither party was satisfied with the ruling and objected.? On appeal, the district court accepted the magistrate judge?s recommendations, but increased the monetary sanctions imposed on the defendant from $500,000 to $625,000.
The district court justified its ruling based on two primary reasons, both based on FRCP 37:
??Under the Rule, the plaintiff was due reasonable expenses caused by the defendant?s failure to comply with the original court e-discovery order. Those costs included ?reasonable legal fees and expenses in litigating this discovery dispute? and unpaid invoices from the appointed computer forensic expert.
???Rule 37 sanctions should be crafted to both punish and deter.? Since the plaintiff had suffered what the court considered extensive prejudice based on defendant?s actions, and that the prejudice was based on the non- compliance with the original court order, the sanctions could and should be imposed.
The Takeaway
With the advent of sophisticated technological tools to find and identify instances of intentional deletion or obfuscation of computer generated files, corporations and their attorneys are undergoing increased risks when they try and make information disappear or attempt to hide information from the opposition.? Parties who believe that the ESI being discovered is insufficient or suspicious should avail themselves of the forensic expertise required to obtain the information that is discoverable and provide the courts with proof of sanctionable behavior.? Forensic examination of computers will often identify behavior and missing documents that are very difficult to justify to a judge and should be a part of every litigator?s tool box.
While it can be difficult to determine that there are gaps in discovery that should be filled and request specific documents be produced, there are tools on the market that can help a firm proactively examine the existing information and identify logical gaps (the missing ESI.? Applying advanced data analytics tools to ESI can help identify potential gaps in information.? One of the strongest tools in this area is semantic language search technology.? It seeks to improve search accuracy by understanding the intent of the searcher and the contextual meaning of terms as they appear in a searchable text.? Semantic search processes consider multiple points of information simultaneously; including context of search, location, intent, word variation, synonyms, generalized and specialized queries, concept matching and translation of natural language queries to provide a result set of documents.? In summary, semantic search lets you query the underlying meaning of the document and therefore identify obvious missing information.
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