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The Most Important Case of the Year (so far) — That You Haven’t Heard Of

Wednesday, May 10, 2017

By Tom O’Connor, Senior eDiscovery Consultant

Before I make the big reveal … first, some other notable cases:

I’m sure that most of our readers have read where recently police obtained search warrants for a woman’s Fitbit, cell phone, computer and house alarm logs, then used data obtained from those devices to contradict her husband’s story about the events of the night she was murdered.  He was subsequently charged with the crime. Click here for more details.

Because of its direct application to eDiscovery, a good number of you have undoubtedly also read the recent decision on Goodyear Tire & Rubber Co. v. Haeger in which a unanimous Supreme Court (Justice Gorsuch did not participate) overturned a $2.7 million sanction for discovery misconduct, saying a district court erred by including legal fees beyond those resulting from the misconduct.

The sanction had been imposed against Goodyear Tire & Rubber, as well as two lawyers representing the company, for failure to disclose tire test results during discovery in litigation based on a damages claim due to a failed tire.

Justice Kagan wrote the opinion which held that when a federal court uses its inherent authority to sanction bad faith misconduct through an award of legal fees, the amount must be no more than the actual fees incurred as a direct result of the misconduct.

Justice Kagan called this a “but-for causation standard”, stating that, “the court’s fundamental job is to determine whether a given legal fee—say, for taking a deposition or drafting a motion—would or would not have been incurred in the absence of the sanctioned conduct.”

The application to eDiscovery and sanctions awards is clear and in fact, had been addressed shortly after the 2015 amendments to the FRCP by Judge James Francis in the case of CAT3 v. Black Lineage, 2016 WL 154116 (S.D.N.Y. Jan. 12, 2016).  In that case, Judge Francis held the Courts inherent authority to order sanctions trumped any restrictions on spoliation sanctions under revised FRCP 37(e).

And now … the Most Important Case

I’m going to suggest though, that the most important case of the past several months is actually Bird v. Wells Fargo Bank, No. 16-1130 (E.D. Cali., Mar. 31, 2017) in which California Magistrate Judge Erica P. Grosjean, after a complete breakdown in the discovery process of the case, ordered the defendant to disclose its discovery plan, search terms and custodians, produce its document retention policies regarding the destruction of employee emails, produce an initial privilege log and then produce several specific categories of documents.

In other words, the Judge imposed a specific plan for the scope of discovery to be performed by a party which she found had failed to live up to their obligations.  I highly recommend you read the entire order here — as a roadmap of what NOT to do in handling eDiscovery.

But most interesting to me is some of the dicta:

At one point, Judge Grosjean said that, “The Court is particularly troubled by Defendant Wells Fargo’s approach to discovery in this case. Defendant has taken the legally unsupportable position that it is not under any obligation to provide electronic discovery unless and until there is full agreement on search terms.”    Legally unsupportable!

At a later point, she notes, “Defendant also withheld information about Plaintiff’s inbox until after the initial discovery cut-off. It both fails to provide any date certain for production and will not extend the schedule a reasonable amount of time.  [And] …….. It continues to threaten to have Plaintiff pay its costs without any legal justification.”   A continued emphasis by the Court on a parties “unreasonable” behavior or lack of “legal justification” for an argument it is propounding is never a good thing. Never.

But most telling to me is this quote, “The Court also takes issue with the tone of Defendant’s communication, such as telling Plaintiff that Defendant’s agreement to produce certain documents will be ‘null and void ab initio’ and that Defendant will request sanctions if Plaintiff did not provide certain search terms by the deadline imposed by Defendant … Such dialogue is not professional and not a good faith attempt to meet and confer.”

We have heard continued reference to the Sedona Cooperation Proclamation over the years.  This Order is the embodiment of that document and the concepts of professionalism and good faith.  The emphasis by the Court in this case is, to my mind, indicative of the current attitude of the judiciary and should serve as a clear warning to litigators everywhere as to how they are expected to behave.

Tom O’Connor

Senior eDiscovery Consultant
Advanced Discovery

Tom O’Connor is nationally known as a consultant, speaker and writer. In his consulting work, Tom specializes in working with law firms and their corporate clients to manage their electronic discovery needs. As senior eDiscovery consultant for Advanced Discovery, he assists clients in database design, implementation and training. He also addresses specific eDiscovery issues such as retention policies, litigation holds and document exchange protocols. Tom speaks at major legal conferences and writes for both the Advanced Discovery blog and national legal publications.

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