If John Constantine had been a lawyer, these sanctions would be his vision of ediscovery hell

Bray & Gillespie Management LLC v. Lexington Ins. Co., 2009 WL 546429 (M.D. Fla., March 4, 2009)

In the movie Constantine, Keanu Reeves plays an occult detective with the ability to detect demonic beings on earth, and to see into hell. Had his character been a lawyer rather than an occult detective, he would simply have to read the Bray & Gillespie decision to see what a vision of ediscovery hell looks like.

The Bray & Gillespie decision addressed some basic ediscovery mistakes involving a request for production of ESI in its native state with its accompanying metadata. However, those mistakes were compounded by what the Magistrate Judge described as material misrepresentations and omissions by counsel for the party producing that data. The decision also stands as a stark reminder that a supervising partner, and his firm can be held liable for the ediscovery snafus of their local counsel and predecessor counsel.

The court recognized that any motion for sanctions, even one which names only the party, puts both the party and its attorney on notice that the court may access sanctions against either or both of them, absent a showing of substantial justification for the conduct at issue. In Bray & Gillespie, the court determined that it was not appropriate to require the client to pay for the sanctions resulting from the decisions made by its outside counsel. Rather, the court sanctioned outside counsel and his firm, and also issued a Rule to Show Cause why another attorney from that firm should also not be personally sanctioned for his conduct in the case. Even more chilling is the fact that the Magistrate Judge indicated that she was willing to entertain additional sanctions, including a request that the court dismiss the case, if the data she ordered produced contained more metadata than what the sanctioned attorneys offered to produce in discovery.

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Buyer beware: suspicious timing warrants adverse inference instruction for spoliation of electronic data, and a punitive damage claim based on that inference

Smith v. Slifer Smith & Frampton/Vail Associates Real Estate, LLC, 2009 WL 482603 (D. Colo., Feb. 25, 2009)

A real estate broker and the brokerage firm he worked for were retained by the plaintiffs to sell a parcel of property in Vail, Colorado. The property was sold for $2,846,250, based on the defendants’ recommendation. Less than three months later, the same property was resold by the buyer in the first transaction for $7,200,000, with the defendants again serving as the broker for that transaction. Plaintiffs subsequently filed suit claiming negligent misrepresentation, fraud, concealment, and that the defendants had breached their statutory duties as a transaction broker.

In discovery, plaintiffs sought production of emails and other electronic documents on the brokerage firm’s servers, and on the broker’s work and home computers. A forensic examination of the broker’s home computer revealed that a secure deletion (wiping) software called “Anti Tracks” had been downloaded from the Internet, and used on the broker’s home computer resulting in the loss of data from thousands of files and folders. A similar examination of the broker’s computer at work revealed that information appeared to have been deleted from that computer as well, and that the computer’s hard drive had been reformatted. Plaintiff’s forensic computer expert opined that the process to reformat the drive was too involved and complicated to be unintentional.

The district court acknowledged that there was no smoking gun establishing who caused the data loss, nor could anyone pinpoint exactly what information had been deleted. However, it was apparent that the defendants had failed to properly preserve potentially relevant information. In the court’s view, the “highly-suspect timing” of the use of the wiping software on the defendant’s home computer and the reformatting of the hard drive of his work computer was sufficient to establish that evidence had been destroyed in bad faith to prevent disclosure of relevant information from those computers. Therefore, the court ordered that an adverse inference instruction be issued, and allowed the plaintiffs to add a punitive damages claim based on the adverse inference. The court further awarded plaintiffs their fees and costs, including expert costs associated with plaintiffs’ sanctions motion, and related discovery expenses incurred as a result of the defendants’ actions.

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Policy of no modification saves website operator from spoliation sanctions

GW Equity LLC v. XCentric Ventures LLC, 2009 WL 62168 (N.D. Tex. January 9, 2009)

Information on a company’s website is relevant in numerous types of cases. But website content is sometimes dynamic, and the mechanics of preservation can be tricky. A recent case from the U.S. District Court for the Northern District of Texas provide some guidance.

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Learn how to avoid ediscovery sanctions from Cool Hand Luke

Keithley v. The Home Store.com, Inc., 2008 WL 3833384 (N.D.Cal., Aug.12, 2008)

What is the one line from the movie Cool Hand Luke that everyone remembers?

No, it’s not Carl the floor walker’s speech about spending “a night in the box” for various rule violations. And no, it’s not Dragline’s comments about Lucille as she washes a car in front of the chain gang while they are cutting down weeds on the side of a road. It’s the Captain’s infamous line after he knocks Luke to the ground with a billy club: “What we’ve got here is failure to communicate.” And that is today’s tip for avoiding ediscovery sanctions.

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