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Archive for September 15th, 2008

Complaints over E-discovery Costs Intensify

Posted by rjbiii on September 15, 2008

I have recently read two separate articles discussing the need to “fix” the current system, with respect to e-discovery. The Economist, has posted an article that concludes that the U.S. is “way behind” other countries’ civil systems because of Judges’ inability to control the scope of discovery. The situation, according to the article, has led to the need for experts who “merrily” charge large sums of money for their assistance:

This has led to a new boom industry of specialised e-discovery service providers which merrily charge $125-600 an hour. George Socha, a consultant, estimates that their annual revenues have grown from $40m in 1999 to about $2 billion in 2006 and may hit $4 billion next year.

Interestingly, the article begins with an example of a plaintiff involved in a lawsuit with an HMO, who has been “daunted” by the scope of e-discovery. Again, it is not the HMO complaining…it is the plaintiff, a teen-aged girl complaining about decisions made by an HMO. Evidently, the defendant requested production of “practically everything the teenagers had said on their Facebook and MySpace profiles, in instant-messaging threads, text messages, e-mails, blog posts and whatever else the girls might have done online”

The article mentions that the attorney objected on grounds of privacy, and lost. One would also hope that relevance and undue burden might also have been broached. Because the plaintiff’s psychological state is an issue, I suppose relevance can construed rather broadly to almost any communication she generates, but nevertheless, one would think that the Judge could use discretion to curtail any “fishing expedition.” One of the articles biggest complaints is that Judges don’t use their discretion to manage the scope of discovery. One wonders, though, how educated counsel is on the principles and laws of ESI. It has been my observation that plaintiffs firm are behind the learning curve. Another interesting point is the placement of this case at the front of the story. Most of the complaints I’ve heard come from the corporate side, claiming that plaintiff’s are using the costs of EDD against them to encourage settlements. While I love The Economist, it is certainly a business-friendly publication. It does go on to extensively discuss the issues that corporations are having in the new environment.

A related article comes from the ABA, wherein trial lawyers call e-discovery a “morass” (registration may be required):

The civil justice system in the United States is so bogged down in a “morass” of e-discovery that it is often too expensive for litigants to take their cases to trial, according to a survey of trial lawyers.

Now the next step is to fix this increasingly dysfunctional system, according to a press release (PDF) about an interim report (reg. req.) on the survey, which is a joint project of the American College of Trial Lawyers and the University of Denver’s Institute for the Advancement of the American Legal System (IAALS).

Among the key findings of the survey: Judges don’t use sufficient discretion to “control excessive discovery.” The bottom line from the survey:

“Discovery is out of control. Attorneys know it; judges know it; and clients know it. E-discovery just makes it more obvious,” [former Colorado Supreme Court Justice Rebecca Love Kourlis] writes. “We have to figure out a way to fix it.

I think that part of the problem here is that attorneys and judges, who work in an industry designed to be ponderous, now find themselves in a new world. And most of them don’t like it. Again, in theory, digital evidence is easier to deal with. Why? Well, compare the using a search interface with the manual process of hunting through boxes, squinting at index sheets, and and working your way through mountains of paper in hot warehouses. Which sounds like a better system?

So while we can discuss the need to prevent fishing expeditions, or parties’ use of discovery as leverage to prop up weak cases, we need to also understand that we are in the early part of this new age; a time of transition. This will get easier.

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House passes Proposed FRE 502

Posted by rjbiii on September 15, 2008

Last Monday, the House passed the proposed rule, which is designed to protect parties against the inadvertent disclosure of privileged material, and the waiver of the privilege because of the disclosure.

The rule takes effect on any new matters, and to the extent that is “just and practicable,” on any matters currently pending. The text of the rule can be found here (pdf), and the congressional record, containing legislative intent, is here (also pdf).

Posted in FRE 502, Legislation, Waiver of Privilege | Leave a Comment »

Case Blurb: Nursing Home Pension Fund; Failure to produce ‘duplicate’ emails from different custodian grounds for sanctions

Posted by rjbiii on September 15, 2008

As to [Defendant] Ellison’s email files, the Court finds that sanctions are appropriate. It is undisputed that defendants produced only 15 emails sent or received by Ellison from Ellison’s own email files, and defendants do not contend that all of Ellison’s emails were preserved in his files. Instead, defendants note that over 1,650 of Ellison’s emails were produced to plaintiffs from the files of other Oracle employees. Defendants, relying on Wachtel v. Health Net, Inc., 2007 WL 1101436 (D.N.J. Apr. 10, 2007), argue that plaintiffs are not entitled to receive multiple copies of Ellison’s emails. The Court disagrees. It could have been helpful to plaintiffs to demonstrate that certain emails were discovered in Ellison’s files; otherwise, for instance, Ellison could argue that he never actually read or received an email that was sent to him, and thus had no knowledge of its contents. Moreover, having established with certainty that numerous emails were not produced from Ellison’s email files–because the emails were produced from other files or accounts–it is impossible to know whether additional unproduced emails were also deleted or not turned over. This uncertainty about the existence of other emails is precisely the reason all of Ellison’s emails should have been preserved and produced.

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 at *6 (N.D.Cal. Sept. 2, 2008 )

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Case Blurb: Nursing Home Pension Fund; Standards for the imposition of ‘lesser sanctions’

Posted by rjbiii on September 15, 2008

The parties debate whether plaintiffs must demonstrate prejudice before the Court can impose lesser sanctions. The Ninth Circuit has recognized that it has sent conflicting signals regarding whether prejudice must be shown in order for the sanction of dismissal to be appropriate. A court in this district recently clarified that the Ninth Circuit has required a showing of prejudice only when courts are acting under Federal Rule of Civil Procedure 37, which applies when a party disobeys a court order regarding discovery. When acting under its inherent authority, however, a district court need not consider prejudice to the party moving for sanctions…and prejudice has not been required when a party moves for lesser sanctions. Here, the Court is considering lesser sanctions in the form of an adverse inference, and even assuming prejudice is required, the Court notes that it would be quite difficult for plaintiffs to demonstrate how they were harmed by evidence to which they do not have access.

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 at *5 (N.D.Cal. Sept. 2, 2008) (internal citations removed).

Posted in 9th Circuit, Adverse Inference, Case Blurbs, Duty to Preserve, Judge Susan Illston, N.D. Cal., Sanctions, Spoliation | Leave a Comment »

Case Blurb: Nursing Home Pension Fund; Process to Determine nature of sanctions a court should impose for destruction of evidence

Posted by rjbiii on September 15, 2008

In determining whether and what type of sanctions to issue, the Third Circuit has explained that courts should consider three factors: 1) “the degree of fault of the party who altered or destroyed the evidence,” 2) “the degree of prejudice suffered by the opposing party,” and 3) “whether there is a lesser sanction that will avoid substantial unfairness to the opposing party.” Schmid v. Milwaukee, 13 F.3d 76, 79 (3rd Cir.1994); see also Toste, 1996 WL 101189 at * 2 (“[A] party’s motive or degree of fault in destroying evidence is relevant to what sanction, if any, is imposed.”). The Ninth Circuit has also explained that “[b]efore imposing the ‘harsh sanction’ of dismissal,” courts should consider “(1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions.” Leon, 464 F.3d at 958. However, district courts “need not make explicit findings regarding each of these factors.” Id.

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 at *4 (N.D.Cal. Sept. 2, 2008)

Posted in 9th Circuit, Case Blurbs, Judge Susan Illston, N.D. Cal., Sanctions, Spoliation | Leave a Comment »

Case Blurb: Nursing Home Pension Fund; Court lists ‘three types of sanctions’ available for destruction of evidence

Posted by rjbiii on September 15, 2008

Courts have developed three types of sanctions for destruction of evidence. First, a court can instruct the jury that it may infer that evidence made unavailable by a party was unfavorable to that party.
Second, a court can exclude witness testimony based on the spoliated evidence.
The third and harshest of sanctions is to dismiss the claim of the party responsible for the spoliation.

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 at *4 (N.D.Cal. Sept. 2, 2008).

Posted in 9th Circuit, Case Blurbs, Judge Susan Illston, N.D. Cal., Sanctions, Spoliation | Leave a Comment »

Case Blurb: Nursing Home Pension Fund; Court discusses ‘legal control’ of evidence

Posted by rjbiii on September 15, 2008

[Requesting Party] additionally allege[s] that defendants failed to preserve or destroyed documents created in preparation for a book entitled Softwar: An Intimate Portrait of Larry Ellison and Oracle (“Softwar” ). The book was written by Matthew Symonds, an author and editor with The Economist, who conducted at least 135 hours of recorded interviews between March 2001 and August 2002 with defendant Ellison. In October 2006, plaintiffs moved to compel defendants to produce the transcripts and audio files of these Softwar interviews. Defendants argued that the materials were not in their custody or control, and Symonds also asserted that the materials were his sole property. On January 2, 2007, Special Master Infante determined that although such materials were in the physical possession of Symonds, Ellison had legal control of them pursuant to a contract between Symonds and Ellison. Winkler Decl. ex. 194. As a result, Special Master Infante ordered defendants to produce copies of “any interview notes, transcripts or tape recordings relating to the book.” Id. at 4. Shortly thereafter, it was revealed that Symonds no longer had the materials in question, and it appears that Symonds may have discarded the laptop computer containing the transcripts and audio files after he learned of plaintiffs’ motion to compel.

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 at *2 (N.D.Cal. Sept. 2, 2008).

Posted in 9th Circuit, Case Blurbs, Data Sources, Duty to Preserve, Duty to Produce, FRCP 34(a), Judge Susan Illston, N.D. Cal., Possession or Custody or Control Of Evidence | Leave a Comment »