Houston Area DA Sanctioned for Contempt after Deleting E-Mails

The strange saga of Harris County District Attorney Chuck Rosenthal is, hopefully, winding down. If you weren’t aware, Rosenthal, has been in the news in Texas for a while, when e-mails containing racist and pornographic content, and love letters to his secretary were found on his work P.C.

In response to civil rights suit against the county, Rosenthal had produced over 1,500 emails to the court.

Newsweek described the situation like this:

Rosenthal is back in the headlines again. Last December, as part of a federal civil rights lawsuit into how justice is meted out in the county, he turned over the (partial) contents of his government e-mail account. And what a batch of e-mails it was. Black ministers called for the Republican to resign because of racist material, including a cartoon depicting an African-American suffering from a “fatal overdose” of watermelon and fried chicken. There were adult video clips and love notes from Rosenthal to his secretary, his mistress during a previous marriage.

Despite the copious production, the DA was found to have failed to have produced another 2,500 e-mails relating to the civil rights case.

A judge listened to testimony…to decide if Harris County’s top prosecutor should be punished for deleting more than 2,500 e-mails after he was ordered to produce them, KPRC Local 2 reported.
[...]
Kelley said he wants the judge to hold Rosenthal in contempt or sanction him for the destruction of the e-mails.

Rosenthal has said in court documents he thought the 2,500 e-mails he is under order to produce were backed up elsewhere and has called the decision to erase them an error in judgment.

As we all know, this is not something a party, especially a party who is an attorney, should do:

Harris County District Attorney Chuck Rosenthal should have known not to delete more than 2,500 e-mails that a court had ordered him to produce, the general counsel for his office testified Thursday in a hearing on whether Rosenthal should be held in contempt.

General Counsel Scott Durfee said Rosenthal was “crestfallen and surprised” when he found out the e-mails had not been backed up elsewhere and could not be recovered. But as an attorney, Rosenthal should have known that the e-mails were evidence and should not be deleted.

“This is not something that would be foreign to a practicing attorney?” U.S. District Judge Kenneth Hoyt asked Durfee.

“It would not,” he replied.

Rosenthal initially resisted calls for resignation, and calls for him to drop out of the next election. Ultimately, though, he found no sanctuary from fellow politicos, and announced his resignation, although he didn’t quite completely acknowledge his responsibility in the affair (no pun intended).

Rosenthal, 62, said a prescription drug combination had impaired his judgment and said media coverage of his e-mails — which included sexually explicit and racist content and affectionate notes to his executive assistant — had taken its toll on his family.

“Although I have enjoyed excellent medical and pharmacological treatment, I have come to learn that the particular combination of drugs prescribed for me in the past has caused some impairment in my judgment,” Rosenthal wrote in his resignation letter.

With respect to the emails, he stated:

“I now understand that I am unable to rely on my memory regarding the steps I took to manage the contents of my desktop and need to rely on reconstructing events from available documents and records,” Rosenthal writes in the declaration. “I have now consulted a medical specialist and am informed by him about conditions that have affected my perception and recollections of the past months. While I am seeking treatment to address these matters currently, I am concerned and wish to ask the Court to take into account that my prior testimony and Declaration must be considered in this context.”

Yesterday the Houston Chronicle reported that the Judge, unsurprisingly, was not impressed:

In blistering and scathing language, Hoyt’s court order rebuked Rosenthal for knowingly violating an Oct. 31 subpoena seeking his e-mails.

Hoyt criticized Rosenthal for showing “an intentional willfulness” to disobey the law.

“This conduct reveals a man confident in his status, entrenched in his brand of law,” Hoyt wrote. “He would not or could not acknowledge an authority beyond himself.”

Various contradictions and misrepresentations made Rosenthal’s testimony unreliable and incredible, Hoyt said. “The court views his conduct as venomous and hostile to the judicial process,” Hoyt wrote.

Rosenthal gave several explanations for why he deleted the

e-mails, Hoyt noted, such as believing his general counsel had printed hard copies of the documents and claiming he thought the documents were preserved on the computer network’s backup tapes.

Rosenthal also later testified that he deleted the e-mails to increase his work efficiency and to free memory space on his computer, Hoyt said.

“There is no evidence that Rosenthal’s computer memory space was threatened by additional e-mails or that, in fact, it was short of space. Hence, these reasons — all implausible inconsistencies — defy the law of common sense,” Hoyt wrote.

Rosenthal was fined a total of $18,900; with the County’s General Counsel responsible for $5,000 of that for failing to properly advise Rosenthal on how to properly comply with the subpoena requiring production of the email. The county will meet later to decide how much, if any, of the fine they will assume.

The county has already had to settle the civil suit:

Harris County officials Monday settled a civil rights lawsuit that led to the district attorney’s resignation, KPRC Local 2 reported.
[...]
Harris County commissioners said they were approached with a $1.7 million settlement offer over the weekend.

“The county (Commissioners Court) is concerned about the liability,” Commissioner Steve Radack said. “We are trying to limit as best possible the exposure to the taxpayers in this lawsuit.”

The county will also pay court costs and the Ibarras’ attorney fees.

The newly appointed interim DA now has his hands full with trying to restore confidence in the integrity of the office.

Magidson will serve as interim district attorney until the end of December. During that time, Magidson promised he would restore public confidence
“We’re going to prosecute these cases zealously but they are going to be tempered with justice and we are going to make sure we are doing .the right thing,” he said

The only final comment I have is that the $18,900 is hardly excessive, considering the court’s “blistering” language. Perhaps the court considered the ex-DA’s current plight, and the large settlement amount, in its calculations. If this had been an attorney from a private firm, however, I wonder if the result would have been different?

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)

Why “Spoliation” is a moving Target

In reading a court opinion on the subject, I discovered a passage which sums up where we are at in wading through the quagmire:

There is, in fact, a division of authority among the circuits on this issue. While the tendency is to view that split in terms of whether vel non a showing of bad faith is required, in fact, the diverging views cover a much broader spectrum. On one end of that spectrum, actually representing a distinct minority, are courts that require a showing of bad faith before any form of sanction is applied. Other courts expect such a showing, but only for the imposition of certain more serious sanctions, such as the application of an adverse inference or the entry of a default judgment. Further relaxing the scienter requirement, some courts do not require a showing of bad faith, but do require proof of purposeful, willful or intentional conduct, at least as to certain sanctions, so as not to impose sanctions based solely upon negligent conduct. On the other side of the spectrum, we find courts that do not require a showing of purposeful conduct, at all, but instead require merely that there be a showing of fault, with the degree of fault, ranging from mere negligence to bad faith, impacting the severity of the sanction. If this continuum were not complicated enough, some circuits initially appear to have adopted universal rules, only to later shade their precedents with caveats. Other times, the difference between decisions appear to be more a matter of semantics, perhaps driven by state law, with some courts, for example, identifying as “bad faith” what others would call “recklessness” or even “gross negligence.”

United Medical Supply Co. v. U.S., 77 Fed. Cl. 257, 266-67 (Fed. Cl., 2007).

The calculus of determining what constitutes spoliation is convoluted due to several factors, including: the different rules between circuits; the two sources of authority for sanctions (a court’s inherent authority to manage its cases and FRCP 37 for a violation of a court order); the discretion given individual courts to manage their own affairs; and the understanding (or lack of it) of IT principles by the Judges or Magistrate Judges who are ruling on issues.

Safety first in approaching collections and processing of data…but reasonableness means one shouldn’t have to go to extremes.

Case Blurb: Hawaiian Airlines; Purpose of spoliation doctrine

The spoliation doctrine serves various purposes. One set of purposes is evidentiary and remedial: as a matter of common sense, it is reasonable to assume that, when a person destroys evidence, the evidence was unfavorable to that person; and when evidence is destroyed that might have benefitted one party, it is appropriate to impose a sanction that restores the evidentiary status quo. The second category is prophylactic and punitive: spoliation sanctions deter others who might be tempted to destroy evidence and uphold the integrity of the judicial process.

In re Hawaiian Airlines, Inc., 2007 WL 3172642 (Bkrtcy. D.Hawaii October 30, 2007).

Case Blurb: L-3; Elements of Spoliation, 11th Circuit

“‘Spoliation’ is the ‘intentional destruction, mutilation,alteration, or concealment of evidence.’” Federal law governs the imposition of spoliation sanctions in this case, but state law may be consulted to guide the Court in its analysis.

Generally, spoliation is established when the party seeking sanctions proves (1) that the missing evidence existed at one time;(2) that the alleged spoliator had a duty to preserve the evidence;and (3) that the evidence was crucial to the movant being able to prove its prima facie case or defense. Additionally, in this circuit sanctions for spoliation of evidence are appropriate “only when the absence of that evidence is predicated on bad faith. . . . ‘Mere negligence’ in losing or destroying the records is not enough for an adverse inference, as ‘it does not sustain an inference of consciousness of a weak case.’”

Lockheed Martin Corp. v. L-3 Communications Corp., 2007 U.S. Dist. LEXIS 79572 (M.D. Fla. Oct. 25, 2007) (internal citations removed).

Case Blurb: APC Filtration; Parties held culpable for violating court order before it was ever issued

Becker and SourceOne failed to comply with [the court's] order to produce documents because Becker had earlier discarded the computer. Becker and SourceOne’s own answers to APC’s interrogatories indicate that Becker communicated by email with Zehua but that “[t]he dates and times of these e-mail exchanges are unknown” because “Becker no longer is in possession of the e-mails.” (Defs.’ Answer to Pl.’s Interrog. No. 5.) Becker and SourceOne provided a similar answer with respect to Becker’s communications with AmSan. (Defs.’ Answer to Pl.’s Interrog. No. 15.) It is now clear that there must have been some communications between Becker, Zehua, and AmSan during Becker’s period of employment with APC because, as the parties agreed at oral argument, Becker and SourceOne had established contractual relationships with both of these companies prior to his termination in January 2007. Furthermore, the parties now agree that AmSan has responded to a subpoena by producing over 300 pages of e-mail correspondence, containing approximately 60 messages. Whether these represent the entirety of Becker’s communications in furtherance of his plan to compete with APC or merely the tip of the iceberg is impossible to tell, since the computer no longer exists. This is precisely the situation that the rules governing discovery are intended to prevent.

The Court specifically finds, in light of what Becker did (traveling 20 miles to dispose of the computer in a construction site Dumpster) and when he did it (within days of receiving notice of APC’s lawsuit), that Becker acted in bad faith in order to prevent APC from discovering potentially damaging evidence. See Langley, 107 F.3d at 514 (Rule 37 sanctions may only be imposed where a party displays willfulness, bad faith, or fault). Although this conduct occurred prior to the Court’s order, it is enough that Becker’s culpable conduct “eventually culminated in the violation.” Id. (quoting Marrocco v. Gen, Motors Corp., 966 F.2d 220, 224 (7th Cir. 1992)). Therefore, because Becker acted in bad faith and violated a discovery order issued by this Court, Becker and SourceOne are subject to sanctions under Rule 37(b).

(emphasis added)

APC Filtration, Inc. v. Becker, 2007 U.S. Dist. LEXIS 76221 (N.D. Ill. Oct. 12, 2007)

The Basics on Sanctions

This is the Fourth Installment of Effectively Managing E-Discovery.

Which actions or omissions may give rise to sanctions is partly dependent upon the circuit in which one practices. First, the attorney approaching a discovery project of any size should not have any misguided notion that judges are apt to forgive a lack of familiarity of his client’s system. The Conference of Chief judges stated in a report it issued 2005:

While the manner in which this encouragement should be given will, of necessity, depend on the procedures and practices of a particular jurisdiction, the court should establish the expectation early that counsel must be well informed about their clients’ electronic records. FN1

FN1: Conference of Chief Judges, Guidelines for State Trial Courts Regarding Discovery of Electronically-Stored Information (Rev. Draft, Sept. 2005). See also, Leonard Dutchman, Preserving Data in the Wake of Amended Rule 37(f), http://www.law.com/jsp/legaltechnology/PublArticleFriendlyLT.jsp?id=1160643922347 (last visited October 30, 2006) (“It is ultimately counsel’s duty to preserve and gather discoverable ESI.”); Phoenix Four, Inc. v. Strategic Resources Corp., 2006 WL 1409413 (S.D.N.Y May 23, 2006), *5 (citing Zubulake V) (“Counsel has the duty to properly communicate with its client to ensure that ‘all sources of relevant information [are] discovered.’ “); Craig Ball, EDD Showcase: Worst Case Scenario, Law Technology News (Oct. 31, 2006) at http://www.law.com/jsp/legaltechnology/pubArticleLT.jsp?id=1162215324083, (quoting J. William Speros, referring to attorney liability and explicitly mentioning Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 108 (2d Cir. 2002) and In re Worldcom, 2004 WL 768573 (S.D.N.Y. 2004)) (“We’ve seen courts hold parties responsible for failing to supervise their vendors.”)

As a matter of principle, sanctions should be used sparingly. Fed. R. Civ. P. R. 37(b)(2). The Federal Rules of Civil Procedure authorize a court to issue, as sanctions for disobeying discovery orders, the following orders (not an exclusive list):

• An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
• An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence; and
• An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party.

Federal courts also possess an inherent authority to impose sanctions for the conduct of litigants in counsel regardless of whether the behavior at issue would be covered specifically under a rule or statute. O’Brien v. Ed Donnelly Ents., Inc., 2006 WL 2583327, at *2 (S.D. Ohio Sept. 5, 2006). The court is given a great deal of latitude in deciding what, if any, sanction should be imposed for bad conduct. Id. What kind of conduct may be penalized? The spectrum of attorney or disputant behavior subject to sanction is large, but for the purposes here, non-production or late production of relevant documents is behavior subject to sanctions, as is spoliation, and the destruction of evidence. Spoliation may be defined as “the failure to preserve evidence that is relevant to pending or potential litigation. See, e.g., Jimenez-Sanchez Restaurants, LLC, Civ. No. 05-1131 (JAG), 2007 WL 1098667, at *1 (D. Puerto Rico March 5, 2007).

The purpose of sanctions is to “deter parties from engaging in [prohibited conduct], place the risk of an erroneous judgment on the party who wrongfully created the risk, and restore the prejudiced party to the position it would have been in had the misconduct not occurred.” Consolidated Aluminum Corp. v. Alcoa, Inc., 2006 WL 2583308 (M.D.La. July 19, 2006). A court has “broad discretion to fashion appropriate sanctions on a case by case basis.” Phoenix Four, Inc., 2006 WL 1409413 at *3. The form in which sanctions can appear include:

• Exclusion of “spoiled evidence.
• Allowance of an Adverse Inference;
• Allowance of further discovery by the party injured by the misconduct;
• Monetary sanctions;
• Dismissal of a case (for misconduct by the plaintiff or cross-plaintiff).
• Default Judgment.

Although the flexibility accorded district courts is understandable, clarity is diminished because of it. Additionally, clarity suffers further from the fact that particular sanctions may be imposed for differing standards of conduct, depending upon the circuit in which the case is taking place.

Judge: Attorney ‘crossed the line from zealous advocate to sanctionable conduct’

Judge James Gardner, a district court judge in the Eastern District of Pennsylvania, declared:

In his opinion, Gardner said the defendant insurance companies and their counsel interposed a number of legally deficient general objections to discovery requests for the purpose of delaying the case and increasing costs. The judge laid most of the blame on Summers, the former lead counsel for the defense. Attorneys at Hangley Aronchick and Stevens & Lee had withdrawn as counsel last year, Fox said.

“John S. Summers … engaged in a course of conduct which constituted bad faith in this matter. I found his testimony evasive,” Gardner said. “I conclude that but for his actions, that the discovery process would have proceeded in a much more orderly and expeditious manner.

“If not for the actions of attorney Summers, there would have been no need to appoint a Special Discovery Master in this case,” he said. “Thus … it is clear that attorney Summers crossed the line from zealous advocacy to sanctionable conduct.”

The court concluded that the sole reasons for the “legally deficient objections” made by Mr. Summers was to delay discovery. An expert interviewed in the article stated that while such practice was standard trial strategy, Mr. Summers had taken it too far. Mr. Summer’s attorney in the matter, Lawrence Fox of Drinker Biddle & Reath, argued that such sanctions would “have a chilling effect on attorneys trying to protect their clients,” and that “‘a whole cottage industry’ would pop up to file sanctions motions.”

As I am not familiar with the particulars in the case, I won’t comment on the Mr. Summers’ culpability, however I do find it amusing that Mr. Fox defends the “cottage industry” of using delaying tactics in discovery while condemning another, imaginary cottage industry. Everyone on the business end of these sanctions always derides the effect on the practice of law, while ignoring the effects their own practices have had for years. Ethics laws have addressed the issue of delaying tactics, and standard practice or not, they should be greatly curtailed. That isn’t to say that parties involved in discovery shouldn’t be given time sufficient to overcome whatever procedural and technical challenges exist, but once it becomes obvious that counsel is merely objecting for the sake of delay, and is doing so in bad faith, all bets are off.

The sanctions imposed are monetary in nature, designed to cover legal costs incurred in filing motions for sanctions and costs associated with the hiring of a special discovery master. There has been a suggestion that an ethics charge might be forwarded to the appropriate bar committee. The sanctioned parties have vowed appeal the penalties.

Case Blurb: Seroquel; Federal Court’s authority to impose sanctions under FRCP 37

Pursuant to Federal Rule of Civil Procedure 37, the Court may impose broad sanctions for discovery-related abuses. Federal Rule of Civil Procedure 37 governs a party’s failure to make a proper disclosure or cooperate in discovery. For purposes of Rule 37, an incomplete response is to be treated as a failure to respond. Fed. R. Civ. P. 37(a)(3). Rule 37(b)(2) states that a court may grant sanctions against a party that “fails to obey an order to provide or permit discovery.”

Sanctions may be granted against a party under Rule 37(b)(2) if there is noncompliance with a court order, notwithstanding a lack of wilfulness or bad faith, although such factors “are relevant … to the sanction to be imposed for the failure.” 8A Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure § 2283, at 608 (2d ed.1994); see Melendez v. Ill. Bell Tel. Co., 79 F.3d 661, 671 (7th Cir.1996) (”Bad faith … is not required for a district court to sanction a party for discovery abuses. Sanctions are proper upon a finding of wilfulness, bad faith, or fault on the part of the noncomplying litigant.”); Alexander v. Fed. Bureau of Investigation, 186 F.R.D. 78, 88 (D.D.C.199 ( “In making the determination of whether to impose sanctions, Rule 37(b)(2) does not require a showing of willfulness or bad faith as a prerequisite to the imposition of sanctions upon a party.” (citations omitted)).

The district court has broad discretion to fashion appropriate sanctions for the violation of discovery orders. United States v. Certain Real Property Located at Route 1, 126 F.3d 1314, 1317 (11th Cir.1997); see also Nat’l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 642, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976)); Friends of Animals, Inc. v. U.S. Surgical Corp., 131 F.3d 332, 334 (2d Cir.1997) (”A district court has broad power to impose Rule 37(b) sanctions in response to abusive litigation practices.”).

E-discovery Pitfalls: What a Tangled Web we Weave…

The second installment in our series on E-Discovery Pitfalls.

Law.com has posted an article in which a team of lawyers is now trying to justify their management of discovery project gone wrong:

Attorneys who once represented Qualcomm Inc. in its ill-fated federal patent case against Broadcom Corp. have asked a judge to pierce their client’s privileged communications.

With the threat of formal sanctions bearing down on them, lawyers at Heller Ehrman and Day Casebeer Madrid & Batchelder — Qualcomm’s former litigation counsel — are asking for a rare exception to privilege so they can explain to the judge how their side failed to produce hundreds of thousands of relevant documents during discovery in the San Diego case.

Qualcomm, citing privilege, has refused to produce any evidence about the discovery error. Magistrate Judge Barbara Major has ordered the attorneys to show cause at an Oct. 12 hearing as to why they should not be sanctioned. Now, in advance of the hearing, many of the outside counsel have hired their own lawyers and have been trying to find a way to explain what happened.

(emphasis added)

Obviously, this is an ugly situation for all parties, and it looks to get uglier. Lifting privilege is one of those actions necessary to examine an attorney’s management of a case, and is an element in bar malpractice suits. All the elements of a worst case scenario seem present with respect to a lawsuit: unhappy clients, their former attorneys who find themselves threatened by a deadly triple-threat of sanctions, malpractice actions, and state bar proceedings. Now, whether the attorneys are responsible or not is something that will only come out with further examination, although there is ample case law that states that ultimately the buck stops with counsel. However, an attorney doesn’t actually physically collect the data, so counsel’s responsibility is far from absolute.

How did we get here? To find out, let’s reboot and start from the beginning.