Case Blurb: Prof’l Basketball Club; Court discusses scope of duty to preserve

Fed.R.Civ.P. 34(a)(1)(A) allows a party to serve on any other party a request for relevant electronically stored information in the “responding party’s possession, custody, or control.”Only one of these requirements need be met. Legal ownership over the electronically stored information is not determinative, nor is possession necessary if the party has custody or control over the items. Further, “[c]ontrol is defined as the legal right to obtain documents upon demand.” Documents may be within the “custody” or “control” of a party even thought they are in the possession of nonparties. A legal right is evaluated in light of the facts of each case, but central to each case is the relationship between the person having actual possession of the document and the party or the transaction at issue. A legal right to obtain upon demand electronic information can also be established by the existence of a principal-agent relationship.

City of Seattle v. Prof’l Basketball Club, LLC, 2008 WL 539809 (W.D. Wash. Feb. 25, 2008)(emphasis added)(citations removed).

Case Summary: Bunnell; Terminating Sanctions and Default Judgment appropriate for Willful, Systemic Spoliation

In this copyright infringement case, the court held that terminating sanctions and the entry of default judgment in favor of the requesting party was appropriate the court found:

• User forum postings had been systematically reviewed for the purpose of modifying or deleting those which referred to acts associated with copyright infringement;
• Directory headings where copyrighted content was stored was changed from specific names of television shows to more generalized names (e.g., “TV-Unsorted”).
• Evidence suggested that [Producing Party] may have failed to produce previously existing, unaltered versions of these directories.
• Producing Party failed to produce, and claimed not to possess, the full IP addresses related to clients downloading works protected by copyright laws, where evidence suggested that the party did in fact have this information.
• Producing party failed to produce names of forum moderators, as required.

Columbia Pictures Inc. v. Bunnell, No. 2:06-cv-01093 (C.D. Cal. Dec. 13, 2007) (Order Granting Plaintiffs’ Motion for Terminating Sanctions)

Case Blurb: Bunnell; Deleting and modifying user forum postings constitutes willful spoliation

[Requesting Parties] claim that [Producing Parties] responded to the filing of this lawsuit with a plan to delete and modify “hundreds or thousands” of postings on [Producing Party's] forums whose content included references to copyright infringement (the issue in the case).

Forum postings were modified to replace the names of copyrighted works with, for example, “[some movie 1]” and “[some movie 2].” Two forum threads were deleted entirely: a thread on how to “crack” or bypass the copyright security on electronic games and a glossary of terms like CAM, TS, DVDSCR, and Telecine (terms referring to methods of copying content).

This process was implemented to “clean up” the site in response to the lawsuit, with an eye to avoiding future complaints of copyright infringement. [Producing Party] claims that it assumed [Requesting Party] had already seen the existing forum postings. Thus, its intention was not to destroy evidence but to “steer clear of anything related to piracy.” This contention is simply not believable. The destruction of evidence clearly relevant on the issue of copyright infringement cannot be justified by the assumption that it’s already been viewed by [Requesting Party].

Most piracy-related threads were closed and removed from public view, leaving their content intact, rather than modified.

Vbulletin, the software [Producing Party] uses to operate the forums, “does not save material which has been edited from the post.”

Columbia Pictures Inc. v. Bunnell, No. 2:06-cv-01093 (C.D. Cal. Dec. 13, 2007) (Order Granting Plaintiffs’ Motion for Terminating Sanctions)

Case Blurb: Lowry Development LLC; Producing Party’s destruction of evidence and untruthful testimony warrant sanctions

In the exercise of my discretion in this matter, I have determined that the destruction of this computer occurred at a time [Producing Party] knew or should have known that the computer and the data it contained were part of the evidence in this case. [Producing Party]’s decision to discard the computer was not the product of simple negligence, and [Producing Party]’s untruthful testimony concerning the manner in which this computer was handled is sufficient to infer the necessary element of bad faith in connection with his actions. I am of the opinion that [Requesting Party] should be allowed to introduce evidence concerning the disposition of this computer and concerning Groves’s untruthful testimony about this matter.

The existence of a mutual mistake of fact in connection with the formation of the [Requesting Party] insurance contract is an issue on which Great American would ordinarily bear an extraordinary burden of proof. The jury’s decision on this issue will depend in substantial part on the credibility of [Producing Party]’s testimony, and the parties have recognized that should [Requesting Party] prevail on the defense of mutual mistake [Producing Party], would be liable to the plaintiff for his wind-related losses. In these circumstances, I find that the appropriate sanction for [Producing Party]’s destruction of the data contained in his computer is to ameliorate the effect of this loss of evidence by reducing [Requesting Party]’s burden of proof to a preponderance of the evidence. See: McGuire v. Sigma Coatings, Inc., 48 F.3d 902 (5th Cir.1995). I will so instruct the jury at the appropriate time.

Accordingly, I will grant [Requesting Party]’s motion for sanctions, and I will permit [Requesting Party] to elicit testimony and introduce other evidence related to the destruction of this evidence. After I have heard the evidence in the case, I will fashion an appropriate jury instruction concerning the inferences or conclusions the jury may draw from [Producing Party]’s actions, and [Requesting Party]’s burden of proof on the issue of mutual mistake will be to prove the facts necessary to establish this defense by a preponderance of the evidence.

Great Am. Ins. Co. of N.Y. v. Lowry Dev., LLC, 2007 WL 4268776 (S.D. Miss. Nov. 30, 2007)

Case Blurb: Benefirst; Good Cause Analysis-Two factors on redundancy and availability of data

[Ed.-The court found that medical claim forms, requested by Plaintiff, would not be reasonably accessible. It then launched into an analysis to determine whether plaintiffs proved that "good cause" existed to compel production notwithstanding the accessibility issue. This blurb is from the analysis of seven factors. These are factors two and three: The quantity of information available from other and more easily accessed sources; and The failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources.]

The gravamen of the Plaintiffs’ Amended Complaint is that BeneFirst mishandled their employees’ medical claims by failing to determine eligibility for payment, the availability of co-payment and co-insurance, and subrogation. The processing of the claim forms was presumably the mechanism for making these determinations. While the Amended Complaint and subsequent pleadings are silent, the relevant time period appears to be from 2001 to 2004.*

*I so find because this litigation was commenced in 2005 and it seems safe to assume that none of the original claim forms and medical bills were still in existence at that time (if they were, BeneFirst presumably would have retained them).

According to BeneFirst, the original claim forms and medical bills were processed by hand, kept for 60 days, converted to a digital image and then destroyed. Therefore, digital images which constitute the information requested by the Plaintiffs are in the custody and control of BeneFirst and are not available through any other source.

These factors favor the Plaintiffs.

W.E. Aubuchon Co., Inc. v. BeneFirst, LLC, 245 F.R.D. 38 (D. Mass. 2007)

(Pre)serve and Protect [yourself]

Eric Sinrod, a partner at Duane Morris, has posted a story highlighting a case that we have featured in our case blurbs: APC Filtration, Inc. v. Becker. Entitled Dude, what happened to my PC?, Mr. Sinrod discusses describes the action:

The defendant founder of the competing company, within days of receiving the plaintiff’s complaint, disposed of his computer. He did so by taking the device 20 miles away to a construction site to get rid of it in a dumpster.

Doesn’t look good, does it? The defendant founder argued that his conduct was proper because he had been told that his computer had crashed and that it was beyond repair.

The judge did not buy this excuse and found that the founder’s conduct was in bad faith. The judge also determined that this conduct violated a court order that required production of all records of communications with the plaintiff’s former supplier and prospective customer–records that may have been contained on the disposed and destroyed computer.

He then uses this story to discuss the general issues associated with preserving data and penalties associated with failing to adequately do so.

Case Blurb: NSA Telecom Records Litigation; Discussing Preservation of Relevant Data

The duty [to preserve] extends to documents, data and tangible things in the possession, custody and control of the parties to this action…

“Preservation” is to be interpreted broadly to accomplish the goal of maintaining the integrity of all documents, data and tangible things reasonably anticipated to be subject to discovery under FRCP 26, 45 and 56(e) in this action. Preservation includes taking reasonable steps to prevent the partial or full destruction, alteration, testing, deletion, shredding, incineration, wiping, relocation, migration, theft, or mutation of such material, as well as negligent or intentional handling that would make material incomplete or inaccessible.

Case Blurb: NSA Telecom Records Litigation; What items are covered by the duty to preserve?

The duty extends to documents, data and tangible things in the possession, custody and control of the parties to this action…

“Documents, data and tangible things” is to be interpreted broadly to include writings, records, files, correspondence, reports, memoranda, calendars, diaries, minutes, electronic messages, voicemail, e-mail, telephone message records or logs, computer and network activity logs, hard drives, backup data, removable computer storage media such as tapes, disks and cards, printouts, document image files, web pages, databases, spreadsheets, software, books, ledgers, journals, orders, invoices, bills, vouchers, checks, statements, worksheets, summaries, compilations, computations, charts, diagrams, graphic presentations, drawings, films, digital or chemical process photographs, video, phonographic, tape or digital recordings or transcripts thereof, drafts, jottings and notes. Information that serves to identify, locate, or link such material, such as file inventories, file folders, indices and metadata, is also included in this definition.

In re Nat’l. Security Agency Telecomms. Records Litig., 2007 WL 3306579 (N.D. Cal. Nov. 6, 2007)

Case Blurb; NSA Telecom Records Litigation; Duty to Preserve Discussed

The duty [to preserve relevant data] extends to documents, data and tangible things in the possession, custody and control of the parties to this action, and any employees, agents, contractors, carriers, bailees or other non-parties who possess materials reasonably anticipated to be subject to discovery in this action. Counsel are under an obligation to exercise efforts to identify and notify such non-parties, including employees of corporate or institutional parties.

In re Nat’l. Security Agency Telecomms. Records Litig., 2007 WL 3306579 (N.D. Cal. Nov. 6, 2007)

Preservation on Demand (Maybe)

Tom Lahiff, blogging on Retention and Preservation, writes a great post about the effect of demand letters. The narrative takes a surprising turn when he discusses not only the letter’s effect on the recipient, but also on the sender:

Two recent decisions by magistrate judges resolving motions for sanctions based on defendants’ discovery violations illustrate that (i) a party’s own conduct can inadvertently trigger an obligation to preserve, and (ii) unless a demand letter is specific regarding the possibility of litigation, a court might refuse to find that receipt of such a letter triggered an obligation to preserve. Google Inc. v. American Blind & Wallpaper Factory, Inc., 2007 WL 1848665 (N.D. Cal. June 27, 2007); Cache La Poudre Feeds, LLC. V. Land O’Lakes, Inc., 2007 WL 684001 (D. Colo. Mar. 2, 2007).
[...]
Indeed, depending on the circumstances, it may be that by sending a demand letter you may have imposed a duty on yourself without imposing a corresponding duty on the other side.

Neat little twist, there; isn’t it? Read the rest of the article, you’ll be glad you did.

[HT: Information Governance Engagement Area]