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Archive for March, 2010

Case Blurb: Cammarata; The difficulty of proving relevance and prejudice of destroyed documents

Posted by rjbiii on March 29, 2010

It is well established that a party seeking the sanction of an adverse inference instruction based on spoliation of evidence must establish that: (1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the evidence was destroyed with a culpable state of mind; and (3) the destroyed evidence was “relevant” to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense. The “relevance” and “prejudice” factors of the adverse inference analysis are often broken down into three subparts:

(1) whether the evidence is relevant to the lawsuit;
(2) whether the evidence would have supported the inference sought; and
(3) whether the nondestroying party has suffered prejudice from the destruction of the evidence.

Pension Committee recognized the difficulty and potential for unfairness in requiring an innocent party seeking discovery to show that information lost through spoliation is relevant and prejudicial. Those concerns are acute when the party seeking discovery cannot replace or obtain extrinsic evidence of the content of deleted information. But in many cases–including the present case–there are sources from which at least some of the allegedly spoliated evidence can be obtained. And in many cases–including the present case–the party seeking discovery can also obtain extrinsic evidence of the content of at least some of the deleted information from other documents, deposition testimony, or circumstantial evidence.

Courts recognize that a showing that the lost information is relevant and prejudicial is an important check on spoliation allegations and sanctions motions. Courts have held that speculative or generalized assertions that the missing evidence would have been favorable to the party seeking sanctions are insufficient. By contrast, when the evidence in the case as a whole would allow a reasonable fact finder to conclude that the missing evidence would have helped the requesting party support its claims or defenses, that may be a sufficient showing of both relevance and prejudice to make an adverse inference instruction appropriate.

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573, 30-31 (S.D. Tex. Feb. 19, 2010) (referring to Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, No. 05 Civ. 9016, 2010 U.S. Dist. LEXIS 4546, 2010 WL 184312, at *3 (S.D.N.Y. Jan. 15, 2010))

See case Summary for Pension Committee here.

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Posted in 5th Circuit, Adverse Inference, Case Blurbs, Judge Lee H. Rosenthal, S.D. Tex., Sanctions, Spoliation | Tagged: , | Leave a Comment »

Case Blurb: Cammarata; Bad Faith a Requirement for the Imposition of Severe sanctions in the 5th Cir

Posted by rjbiii on March 29, 2010

As a general rule, in this circuit, the severe sanctions of granting default judgment, striking pleadings, or giving adverse inference instructions may not be imposed unless there is evidence of “bad faith.”

Other circuits have also held negligence insufficient for an adverse inference instruction. The Eleventh Circuit has held that bad faith is required for an adverse inference instruction. The Seventh, Eighth, Tenth, and D.C. Circuits also appear to require bad faith. The First, Fourth, and Ninth Circuits hold that bad faith is not essential to imposing severe sanctions if there is severe prejudice, although the cases often emphasize the presence of bad faith. In the Third Circuit, the courts balance the degree of fault and prejudice.

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573, at *23-24 (S.D. Tex. Feb. 19, 2010)(internal citations removed).

Posted in 5th Circuit, Adverse Inference, Bad Faith, Case Blurbs, Judge Lee H. Rosenthal, S.D. Tex., Sanctions, Spoliation | Leave a Comment »

Case Blurb: Cammarata; On Determining Appropriate Sanctions for Spoliation

Posted by rjbiii on March 29, 2010

Determining whether sanctions are warranted and, if so, what they should include, requires a court to consider both the spoliating party’s culpability and the level of prejudice to the party seeking discovery. Culpability can range along a continuum from destruction intended to make evidence unavailable in litigation to inadvertent loss of information for reasons unrelated to the litigation. Prejudice can range along a continuum from an inability to prove claims or defenses to little or no impact on the presentation of proof. A court’s response to the loss of evidence depends on both the degree of culpability and the extent of prejudice. Even if there is intentional destruction of potentially relevant evidence, if there is no prejudice to the opposing party, that influences the sanctions consequence. And even if there is an inadvertent loss of evidence but severe prejudice to the opposing party, that too will influence the appropriate response, recognizing that sanctions (as opposed to other remedial steps) require some degree of culpability.

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573, at *21-22 (S.D. Tex. Feb. 19, 2010)

Posted in 5th Circuit, Case Blurbs, Judge Lee H. Rosenthal, S.D. Tex., Sanctions, Spoliation | Tagged: , | Leave a Comment »

Case Blurb: Cammarata; Application of General Rules to Spoliation Allegations

Posted by rjbiii on March 29, 2010

These general rules (on spoliation and sanctions) are not controversial. But applying them to determine when a duty to preserve arises in a particular case and the extent of that duty requires careful analysis of the specific facts and circumstances. It can be difficult to draw bright-line distinctions between acceptable and unacceptable conduct in preserving information and in conducting discovery, either prospectively or with the benefit (and distortion) of hindsight. Whether preservation or discovery conduct is acceptable in a case depends on what is reasonable, and that in turn depends on whether what was done–or not done–was proportional to that case and consistent with clearly established applicable standards. As Judge Scheindlin pointed out in Pension Committee, that analysis depends heavily on the facts and circumstances of each case and cannot be reduced to a generalized checklist of what is acceptable or unacceptable.

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573, at *20-21 (S.D. Tex. Feb. 19, 2010)(referring to Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, No. 05 Civ. 9016, 2010 U.S. Dist. LEXIS 4546, 2010 WL 184312, at *3 (S.D.N.Y. Jan. 15, 2010))

See case Summary for Pension Committee here.

Posted in 5th Circuit, Case Blurbs, Judge Lee H. Rosenthal, S.D. Tex., Sanctions, Spoliation | Tagged: , | Leave a Comment »

Case Blurb: Cammarata; Duty to Preserve

Posted by rjbiii on March 29, 2010

Generally, the duty to preserve arises when a party “‘has notice that the evidence is relevant to litigation or . . . should have known that the evidence may be relevant to future litigation.'” Generally, the duty to preserve extends to documents or tangible things (defined by Federal Rule of Civil Procedure 34) by or to individuals “likely to have discoverable information that the disclosing party may use to support its claims or defenses.”

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573, at *18-19 (S.D. Tex. Feb. 19, 2010)

Posted in 5th Circuit, Case Blurbs, Duty to Preserve, FRCP 34, Judge Lee H. Rosenthal, S.D. Tex. | Leave a Comment »

Case Blurb: Cammarata; Definition of Spoliation

Posted by rjbiii on March 29, 2010

Spoliation is the destruction or the significant and meaningful alteration of evidence.

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573 at *18 (S.D. Tex. Feb. 19, 2010)

Posted in 5th Circuit, Case Blurbs, Judge Lee H. Rosenthal, S.D. Tex., Spoliation | Leave a Comment »

Case Blurb: Cammarata; Court’s Authority to Impose Sanctions for Spoliation

Posted by rjbiii on March 29, 2010

Allegations of spoliation, including the destruction of evidence in pending or reasonably foreseeable litigation, are addressed in federal courts through the inherent power to regulate the litigation process if the conduct occurs before a case is filed or if, for another reason, there is no statute or rule that adequately addresses the conduct. If an applicable statute or rule can adequately sanction the conduct, that statute or rule should ordinarily be applied, with its attendant limits, rather than a more flexible or expansive “inherent power.”

When inherent power does apply, it is “interpreted narrowly, and its reach is limited by its ultimate source–the court’s need to orderly and expeditiously perform its duties.” In [Supreme Court case] Chambers, the inherent power was linked to the bad-faith conduct that affected the litigation. See 501 U.S. at 49. If inherent power, rather than a specific rule or statute, provides the source of the sanctioning authority, under Chambers, it may be limited to a degree of culpability greater than negligence.

See case summary here.

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573, 14-15 (S.D. Tex. Feb. 19, 2010) (internal citations removed).

Posted in 5th Circuit, Case Blurbs, Inherent Power of Fed. Courts, Judge Lee H. Rosenthal, S.D. Tex., Sanctions, Spoliation | Leave a Comment »

Case Summary: Cammarata; Court Discusses E-Discovery Misconduct, Proportionality and Reasonableness

Posted by rjbiii on March 26, 2010

Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573 (S.D. Tex. Feb. 19, 2010)

Procedural History: In Nov. 2006, Rimkus was sued by former employees Nickie Cammarata and Gary Bell. In this action in Louisiana, Cammarata and Bell sought a declaratory judgment that the forum-selection, choice-of-law, noncompetition, and nonsolicitation provisions in agreements they had signed with Rimkus were unenforceable. In response, Rimkus brought two actions in 2007 against these ex-employees in Texas; one in January and one in February. Rimkus alleged breach of the noncompetition and nonsolicitation covenants in their written employment agreements and that they used Rimkus’s trade secrets and proprietary information in setting up and operating a competitive enterprise (U.S. Forensic). The Texas cases were consolidated in this court.

Procedural Posture: The court convened to hear motions by Rimkus alleging that the Cammarata and Bell and their counsel “conspiratorially engaged” in “wholesale discovery abuse” by destroying evidence, failing to preserve evidence after a duty to do so had arisen, lying under oath, failing to comply with court orders, and significantly delaying or failing to produce requested discovery. Defendants responded by acknowledging that they did not preserve “some arguably relevant emails” but argue that Rimkus cannot show prejudice because the missing emails “would be merely cumulative of the evidence already produced.” Rimkus asked the court to strike the defendants’ pleadings,enter a default judgment against them or give an adverse inference jury instruction, and hold both defendants and their counsel in contempt.

Discussion: The court began its analysis by acknowledging the framework recently set out by Judge Scheindlin in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, No. 05 Civ. 9016, 2010 U.S. Dist. LEXIS 4546, 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010) (see our case summary here). Unlike Montreal Pension Plan, this case involve allegations of intentional destruction of ESI, but common analytical issues existed, nevertheless.

In the fifth circuit, Federal Courts apply federal rules in diversity cases. The court stated that allegations of spoliation are addressed by courts by an applicable statute that adequately addresses the conduct with its attendant limits, and if no such statute exists, by the more flexible inherent power of the court. When inherent power does apply, it is interpreted narrowly, and its reach is limited by its ultimate source–the court’s need to orderly and expeditiously perform its duties. In this case, the court’s inherent power and Rule 37 both apply.

Electronically stored information is routinely deleted or altered and affirmative steps are often required to preserve it. Such deletions, alterations, and losses cannot be spoliation unless there is a duty to preserve the information, a culpable breach of that duty, and resulting prejudice. Generally, the duty to preserve arises when a party has notice that the evidence is relevant to litigation or . . . should have known that the evidence may be relevant to future litigation. Generally, the duty to preserve extends to documents or tangible things (defined by Federal Rule of Civil Procedure 34) by or to individuals likely to have discoverable information that the disclosing party may use to support its claims or defenses.

The court stated that bright-line rules were difficult to draw with respect to acceptable and unacceptable behavior in e-discovery matters, and explained that acceptable conduct turned on the concepts of reasonableness and proportionality with respect to the case.

Analysis depends heavily on the facts and circumstances of each case and cannot be reduced to a generalized checklist of what is acceptable or unacceptable. Determining whether sanctions are warranted and, if so, what they should include, requires a court to consider both the spoliating party’s culpability and the level of prejudice to the party seeking discovery. Culpability can range along a continuum from destruction intended to make evidence unavailable in litigation to inadvertent loss of information for reasons unrelated to the litigation. Prejudice can range along a continuum from an inability to prove claims or defenses to little or no impact on the presentation of proof. A court’s response to the loss of evidence depends on both the degree of culpability and the extent of prejudice.

The court explained that the general rule for the 5th Circuit is that severe sanctions of granting default judgment, striking pleadings, or giving adverse inference instructions may not be imposed unless there is evidence of “bad faith.” This is different from the 2d Circuit’s rule allowing for such rulings in instances of gross negligence, under which the court in Pension Committee of the University of Montreal Pension Plan was operating. The court went on to list the general rule of other circuits, as summarized in the table below.

Circuit Standards for Severe Sanctions

The court then contrasted case law between the 5th and 2d circuits, noting that the Supreme Court’s decision in Chambers v. NASCO, Inc., 501 U.S. 32 (U.S. 1991) might limit the ability of a court to impose sanctions when acting under the authority of its inherent powers.

The court then turned to the issue of burden of proof. A party seeking the sanction of an adverse inference instruction based on spoliation of evidence must establish that: (1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the evidence was destroyed with a culpable state of mind; and (3) the destroyed evidence was “relevant” to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.

The “relevance” and “prejudice” factors of the adverse inference analysis are often broken down into three subparts: “(1) whether the evidence is relevant to the lawsuit; (2) whether the evidence would have supported the inference sought; and (3) whether the nondestroying party has suffered prejudice from the destruction of the evidence.” Like the court in Pension Committee, the court here acknowledged the difficulty and potential unfairness in requiring an innocent party seeking discovery to show that information lost through spoliation is relevant and prejudicial. Fortunately in this case (and many others), the party seeking discovery can also obtain extrinsic evidence of the content of at least some of the deleted information from other documents, deposition testimony, or circumstantial evidence.

The court also stated its belief that such requirements act as an important check on spoliation allegations and sanctions motions. Unlike the 2d circuit, case law in the Fifth Circuit indicates that an adverse inference instruction is not proper unless there is a showing that the spoliated evidence would have been relevant. Also unlike the 2d circuit, the 5th circuit has no case law allowing for the presumption that destroyed evidence was relevant or its loss prejudicial, even in the event that bad-faith is established. Before an adverse inference may be drawn, there must be some showing that there is in fact a nexus between the proposed inference and the information contained in the lost evidence and that “some extrinsic evidence of the content of the emails is necessary for the trier of fact to be able to determine in what respect and to what extent the emails would have been detrimental.

In the present case, the party seeking sanctions for deleting emails after a duty to preserve had arisen presented evidence of their contents. The evidence included some recovered deleted emails and circumstantial evidence and deposition testimony relating to the unrecovered records. There was no need to rely on a presumption of relevance or prejudice.

In determining an appropriate penalty, the court stated that the severity of a sanction for failing to preserve when a duty to do so has arisen must be proportionate to the culpability involved and the prejudice that results. A sanction should be no harsher than necessary to respond to the need to punish or deter and to address the impact on discovery. Adverse inference instructions can take varying forms that range in harshness, and are properly viewed as among the most severe sanctions a court can administer.

The court made the findings necessary to submit the spoliation evidence and an adverse inference instruction to the jury. The court noted, however, that the record also presented conflicting evidence about the reasons the defendants deleted the emails and attachments; evidence that some of the deleted emails and attachments were favorable to the defendants; and an extensive amount of other evidence for the plaintiff to use.

The instruction formulated by the court will ask the jury to decide whether the defendants intentionally deleted emails and attachments to prevent their use in litigation. If the jury finds such misconduct, the jury must then decide, considering all the evidence, whether to infer that the lost information would have been unfavorable to the defendants. Rather than instruct the jury on the rebuttable presumption steps, it is sufficient to present the ultimate issue: whether, if the jury has found bad-faith destruction, the jury will then decide to draw the inference that the lost information would have been unfavorable to the defendants

Posted in 5th Circuit, Adverse Inference, Burden of Proof, Case Summary, Duty to Preserve, Inherent Power of Fed. Courts, Judge Lee H. Rosenthal, Litigation Hold, S.D. Tex., Sanctions, Spoliation | 7 Comments »

Around the Block-March 23, 2010

Posted by rjbiii on March 23, 2010

A bit of industry-related news to examine. Let’s start, shall we?

E-Discovery and LPO firm Integreon has been cited in an Indian writ for the unauthorized practice of law. From the company’s press release:

Integreon was the only LPO company and non-law firm named in the petition. “It is unfortunate that our size and clear leadership position in the LPO market has made us the LPO target for the petitioner,” stated Liam Brown, CEO of Integreon. “We were surprised to hear that our range of LPO services, such as document review, e-discovery, contract management and other legal support services could be confused with the practice of law.”

“Integreon collaborates closely on all engagements with its law firm and legal clients to segregate complex legal tasks from those tasks that can be lawfully outsourced and performed by Integreon’s associates,” said Brown. “The premise of the services that we offer to law firms and corporate legal departments is to allow their lawyers to do what they do best: practice law.”

The ABA has posted an article discussing futurist Jordan Furlong‘s advice to bar associations and lawyers on “stay[ing] relevant in changing times.” From the article:

In the 21st century, lawyers need six essential skills, Furlong said: collaboration, project management, emotional intelligence, financial literacy, technological affinity and time management. Bar associations can help lawyers develop these skills by offering the leadership and services their members are seeking.

According to Furlong, lawyers should make themselves more visible while also showing worth to clients and potential clients. He said that lawyers should become holistic providers of “legal health” to clients.

I agree with much in the article…though the terms “lawyers” and “holistic” are rarely seen together…aren’t they?

The AmLaw Daily asks the question Is Mega Law a Dead Man Walking?

That was the subject of several sessions Monday at the Georgetown law school conference on law firm evolution. It speaks to the urgency of the matter, that an institution that thrives on the continuing health of big law firms to hire their deeply in debt graduating students would countenance the question.

The answers from the day: dead, dying, and changing.

A conference attendee’s session notes may be found here.

Posted in Articles, Industry News, International Issues, LPO, Vendor Liability | Tagged: , | Leave a Comment »

Case Summary: Carter; Authentication of Database Records discussed

Posted by rjbiii on March 8, 2010

United States v. Carter, 591 F.3d 656 (D.C. Cir. 2010)

Procedural History: Appeal by a criminal defendant of a of a 150-month sentence imposed by the United States District Court for the District of Columbia upon entry of his guilty plea to five counts of bank robbery.

Facts: At trial, Defendant plead guilty to charges associated with five robberies committed in the Washington, D.C. area. He was sentenced to 150 months in prison. The sentence was significantly affected by the district court’s finding that his criminal history included four theft convictions in Maryland. Carter appealed, challenging the admissibility of the evidence underlying the court’s finding.

Nature of the Dispute: At the sentencing hearing, the State produced Maryland state court records of the disputed convictions. These records were in the form of paper printouts of entries from the District Court of Maryland Criminal System Inquiry Charge/Disposition Display database. The entries for each conviction included Carter’s name, other identifying characteristics, the charge, the case number, the plea, the disposition, and the sentence. The Maryland court clerk’s office certified each printout. Carter objected to the sufficiency of the evidence, arguing that the possibility of data-entry errors rendered the computer records inherently unreliable. He suggested the government needed to produce a copy of the “actual court jacket” for each proceeding to prove the prior convictions. The district court offered to postpone the hearing to give Carter an opportunity to present contrary evidence. Carter declined. The district court then concluded that the printouts were reliable evidence of Defendant’s convictions in Maryland.

Issue at Appeal: When seeking a sentence enhancement, the government must prove a prior conviction by a preponderance of the evidence. Carter argued the printouts the government proffered were insufficient to meet this burden because they are unreliable.

Discussion: The court cited sec. 6A1.3 of the U.S. Sentencing Guidelines Manual (2008) for the proposition that [e]vidence is competent to support factual findings at sentencing if it bears “sufficient indicia of reliability to support its probable accuracy.” The court stated that under the advisory’ committee’s notes for FRE 803(8), certified records of a state court are considered presumptively reliable. The reliability of public records is “found in the declarant’s official duty and the high probability that the duty to make an accurate report has been performed.”

In challenging the records’ reliability, Carter cited no case holding certified records from a state court’s disposition database insufficient to support a finding of a prior conviction by a preponderance of the evidence, and the court continued that it was unaware of any such holding.

Carter argued, however, that the records could not be reliable, because there was no assurance that they conformed to the official case files or signed judgments of conviction. The court acknowledged that there existed a possibility of human error. But this does not warrant the conclusion that these records were inherently unreliable. A defendant must have the opportunity to refute records, an opportunity offered to, and declined by, Carter.

For the first time on appeal, Defendant pointed to a discrepancy between the computer record corresponding to his 1998 theft conviction and the Presentence Investigation Report’s description of the same offense. Alleging no other inaccuracies in the records, Carter presented this discrepancy as demonstrative evidence of their general unreliability. The court was not convinced by this argument, reasoning that a single alleged inaccuracy does not introduce clear error into the district court’s holding in favor reliability.

The court noted that in this case, the discrepancy, even if it truly existed, would not have changed the result of the calculation upon which the sentence was based. Therefore, even in the event that the discrepancy exists, this single inaccuracy does not introduce clear error into the district court’s conclusion, or reversible error into its calculations for sentencing.

Carter attempted to discredit the records, noting that some information they contain were truncated. The records do not cite the statute under which Carter was convicted, and Carter suggested that these omissions render the records inadequate for the purposes for which they were used by the lower court. The court was not persuaded, reasoning that these records contained information sufficient for the district court’s need.

Carter also argued that the decision in United States v. Price, 409 F.3d 436, 366 U.S. App. D.C. 166 (D.C. Cir. 2005) precluded the district court’s conclusion that the records were reliable. The Price court concluded that this unadorned reference was insufficient to “demonstrate that the description in the [PSR] is based on a sufficiently reliable source to establish [its] accuracy.” The court, however, maintained that Carter had interpreted Price too broadly. The Price court did not have before it any specific documentation supporting the alleged convictions, unlike the case here. The court did not describe what information its hypothesized docket listing contained or whether the docket listing was an officially certified court record. Here, the sentencing court had before it certified records with information sufficient to identify the defendant and make the necessary criminal history calculation. It did not rely simply on an unadorned PSR reference to state court records; it had the records themselves.

Because the district court did not err in concluding the certified computer records of the Maryland courts were sufficient to prove his prior convictions, the appellate court affirmed Carter’s sentence.

Posted in Admissibility of ESI, D.D.C., Fed. Circuit, Judge Thomas Beall Griffith, Uncategorized | Tagged: | Leave a Comment »