New Books by Jackson Lewis Principal and New Services for Predictive Coding Assisted Document Review

I serve as National e-Discovery Counsel for Jackson Lewis. I wanted to let you know that I had two books published this year by the ABA. In one, E-Discovery For Everyone, I am the sole author (available now on Amazon). The Foreword is by Judge Paul Grimm. This is my fourth book on electronic discovery. In my second book out this year, Perspectives on Predictive Coding: and other advanced search methods for the legal practitioner, my fifth legal book overall, I am the co-editor (available at the ABA store only) and a contributing author. The Foreword is by Judge Andrew Peck. In addition to editing the book with Jason Baron and Michael Berman, I contributed two chapters:

  • Chapter Five: Reflections on the Cormack and Grossman SIGR Study: the Folly of Using Random Search for Machine Training.
  • Chapter Eleven: Licence to Cull: Two-Filter Document Culling Method That Uses Predictive Coding and Other Search Tools.

The Perspectives on Predictive Coding book is another notch in Jackson Lewis’ well-established credentials in advanced legal search and predictive coding. We know how to use active machine learning, which is a type of artificial intelligence, to assist in large scale document reviews. Since we do not brag about our victories or discuss any details of our cases, you may not even know that Jackson Lewis was defense counsel in Da Silva Moore v. Publicis Groupe & MSL Grp., 287 F.R.D. 182 (S.D.N.Y. 2012) (Peck, M.J.), affd, 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012). This is the landmark case that first approved the use of predictive coding.

Jackson Lewis  was also the only law firm to participate in the National Institute of Standards and Technology TREC program in 2015, and again in 2016, to research advanced document retrieval techniques in the NIST Total Recall Track. See reports on this research at MrEDR.com. Our Hybrid Multimodal method of using predictive coding for document review was extensively tested and proven with the help of our preferred vendor, KrolLDiscovery. Due to our close relationship and high volume of usage, we have extremely low rates with Kroll, but only where we are supervising the document review.

I have also made available a free online instruction program on predictive coding called the TARcourse.com.  The flow-chart shown below is fully explained in the course. We have done or supervised hundreds of document reviews using the enhanced machine learning techniques described in the course, including many where we did not act as the Subject Matter Expert (SME). We are confident that we can assist you in any matter. We can also train your attorneys and experts, time permitting.

Based on our background and experience in e-discovery, and especially in the use of predictive coding for document reviews in large matters, Jackson Lewis has begun offering these services to employers that need expert advice in this area, even if the lawsuit or investigation does not involve employment law issues. We provide both consulting advice and also hands-on document review in large cases. We also have good experience supervising contract document review attorneys in predictive coding reviews. We are happy to work with in-house counsel and counsel of record on matters outside of employment law to assist in the e-discovery and document review portions of the case only. This assistance also sometimes extends into ESI spoliation issues. We know the law, having literally written the books on it for many years. If our expertise might be of assistance to you, even including expert testimony and e-discovery vendor management services, just let us know. I will respond personally, but only after conflict checks clear, of course, so don’t not tell me anything confidential (I will just have to delete without reading).

Please remember, we only represent employers and give preference to existing clients. We will not accept a new matter unless we can give it the time and attention it requires, so even if a conflict check clears, and you are a employer who is not already a client, we may not accept the matter. That caveat does not apply to an employment or labor matter where we are obtained for full representation. As the firm motto says, All We Do is Work, or in my case, where I have limited my practice to e-discovery since 2006, All I Do is e-Work.

 

Court Holds That Self-Selection Of Emails By Employee Satisfies Discovery Obligations

In Mirmina v. Genpact, LLC, Civil Action No. 3:16-CV-00614 (D. Conn. July 27, 2017), a federal court in an employment discrimination matter denied the plaintiff’s motion to compel discovery, finding that the defendant’s reliance on an employee involved in the litigation to self-select relevant documents was appropriate under the circumstances

In this matter, the plaintiff filed a motion seeking to compel the defendant to conduct additional searches for electronically stored information (“ESI”). In support of the motion, the plaintiff expressed “concern” that the defendant was potentially withholding relevant documents that should have been produced in response to the initial discovery protocol. The plaintiff’s concern was based solely on the fact that the defendant’s counsel (both in-house and outside counsel) relied on an employee directly involved in the underlying suit to search her email for responsive documents.

The defendant, however, justified its approach by arguing that its in-house: (1) issued a timely and detailed litigation hold to potential custodians of ESI, directing the preservation of any records and documents that might pertain to the plaintiff’s claims; (2) gave instructions to the ESI custodians regarding the nature of the searches to be performed and the specific search parameters; (3) explained the importance of a thorough search to the ESI custodians; and (4) provided guidance when questions arose during the search.

The court accepted the defendant’s search process based on the close involvement of counsel, as well as counsel’s “sworn representation that all responsive materials have been disclosed.”  The court also noted that the plaintiff had not provided any supportive case law or evidence for its allegations, dismissing them as “mere speculation.”  For these reasons, the court held that an additional searches were not required and denied the plaintiff’s motion.

In the continuing battle to control escalating litigation and e-discovery costs, this decision provides some measure of protection to litigants who choose to rely on the custodians themselves to locate and retrieve relevant documents.  However, as the decision suggests, litigants who rely on self-selection by custodians must take appropriate precautions to ensure that a thorough and complete search is performed, including close oversight by counsel.  Also, this approach may not be advisable in all situations or for all custodians – especially in those situations where the custodian has strong incentive not to produce relevant information.

 

Lack Of Prejudice Precludes Sanctions Following Automatic Deletion Of Emails

Contributing Author: Kathryn B. Moynihan

Magistrate Judge Iain D. Johnston recently held that sanctions were not warranted under Fed. R. Civ. P. 37(e) against a defendant who admitted to erroneously destroying electronically stored information (ESI). While the court did not condone the defendant’s actions (describing them as “disturbing”), it reasoned that the ESI “did not appear to be relevant” and therefore did not prejudice the plaintiff.

In Snider v. Danfoss, No. 4748, 2017 U.S. Dist. LEXIS 107591 (N.D. Ill. July 12, 2017), plaintiff alleged the defendants had retaliated against her for making a complaint of sexual harassment.  During discovery, the plaintiff sought the production of emails from her work account, and from the account of her acting supervisor. The parties later learned that the defendant had, despite receiving a preservation letter, continued to automatically delete an employee’s email account ninety days after their date of termination.  As a result, the email accounts of the plaintiff and her supervisor were deleted.  Although the defendant was able to produce non-confidential emails between a human resources representative and either plaintiff, her supervisor, or another human resources representative, it was not able to directly search the plaintiff or her supervisor’s email accounts.  As a result, the plaintiff filed a motion for sanctions for the destruction of her and her supervisor’s email accounts.

Sanctions were sought under Rule 37(e), which, the court notes, is the sole basis for sanctions against a party that fails to preserve ESI. In deciding whether Rule 37(e) was violated, Judge Johnston focused on the “prejudice suffered by the party seeking ESI,” stating that that it was the lack of prejudice that fundamentally doomed the plaintiff’s claim. The court explained that the emails that were the subject of the motion could have either refuted or supported the defendant’s proffered reason for the plaintiff’s termination (i.e., that the plaintiff had conflicts with her co-workers and needed to be moved).  Judge Johnston concluded that the deletion of any emails that supported the defendant’s proffered reason did not prejudice the plaintiff. Further, to the extent that email existed which refuted the defendant’s proffered reason, the prejudice from the deletion of such emails was minimized by the plaintiff’s first-hand knowledge of her emails, the production of a significant amount of other emails, and the depositions of the parties involved. The court also concluded that there was scant evidence to support the “pure speculation that the lost ESI would benefit [p]laintiff” or to support the allegation the defendant acted in bad faith.

The case underscores the difficulty a moving party faces in obtaining Rule 37 sanctions. Specifically, if a party is unsure of the exact content of the lost ESI, they will face an uphill battle in proving that the loss of that ESI prejudiced them. Moreover, the party’s first-hand knowledge of the ESI will work against them since they now act as a secondary source of the ESI’s content. The case also acts as a helpful piece of precedent, showing that employers who routinely discard ESI while in possession of a preservation letter can still escape Rule 37 sanctions.

Court Grants Request For Social Media Posts Related To Emotional State And Physical Activity

Author: Kurt Ferdenzi

In Gordon v. T.G.R. Logistics, Inc., a personal injury case, the court ordered the plaintiff to produce her entire “Facebook account history” from the date of the accident onward to the extent such posts related to her emotional state and physical activity.  The defendant had requested the history of the plaintiff’s Facebook accounts dating back three years before the accident. At the time of the request, the plaintiff had already delivered Facebook information pertaining to a set of keywords requested by the defendant.  The plaintiff responded that the additional request for three years backlog of Facebook information exceeded the limits of discovery and was unduly burdensome and invasive.  The court recognized that the defendant was casting a wide net with this broad discovery request, but was not convinced the plaintiff had produced all of the relevant Facebook information.  The court limited the discovery request to information posted after the accident and granted the motion to compel discovery.

In reaching its decision, the court focused on the expanding amount of data available for discovery and on the challenges posed by social media. The court first recognized that there is an ever expanding amount of data being created in modern times, noting that, “More data has been created in the last two years than in the entire history of the human race, and the amount of data is projected to grow 10-fold by 2020.”  This ever expanding source of electronically stored information makes limiting the scope of discovery difficult.

The court then considered the recent trend of people posting their thoughts and feelings on social media. What used to be considered private information is now commonly written down and recorded for a group of loosely defined friends and acquaintances to read and see. The court recognized that in cases concerning a person’s physical or mental health, almost any post to social media could provide some sort of relevant information or insight into the person’s thought process.  However, the court also noted that allowing broad discovery of social media activity creates the likelihood that more information will be disclosed “than has historically occurred in civil litigation.” The court held that simply because information is easily and inexpensively obtainable, does not mean that it is discoverable.

The court stated that although there are concerns regarding the scope of social media discovery, the defendant here has presented a “legitimate interest in discovery which is important to the claims and damages it is being asked to pay.” The court examined several cases where social media discovery had been allowed, noting that in employment cases where claims of emotional distress are involved, discovery of social media histories is more easily justified.  When the claim involves the plaintiff’s mental state, social media activity can provide relevant information.  The court used the same concept in this case concerning the cognitive and emotional damages claimed. While the court believed that the defendant was casting too wide a net with its request for three years of social media posts pre-dating the accident, the court also recognized the need for relevant information about the plaintiff’s mental state and cognitive ability after the accident.  For these reasons, the court limited the request to all posts and pictures after the accident which addressed the plaintiff’s emotional state and physical activity and then granted the motion to compel discovery.

This decision highlights the growing scope of electronic discovery, especially as it pertains to social media. The court recognized that social media can provide insight into a person’s mental state and thought process that was previously unavailable.  Additionally, the court specifically pointed out that in an employment context social media history can be particularly useful.

Court Issues Warning To The Bar Regarding Use Of “Boilerplate” Discovery Objections

In Liguria Foods, Inc. v. Griffith Laboratories, Inc., Judge Mark Bennett of the United States District Court for the Northern District of Iowa required both plaintiff and defense counsel to show cause why they should not be sanctioned for discovery abuses based on the excessive use of “boilerplate” objections to discovery requests.  The issue arose when the court was reviewing a discovery dispute between the parties and noticed numerous objections that the court deemed to be improper “boilerplate objections.”  The court subsequently required both parties to submit all of their written discovery responses for the court’s review.  The court also notified counsel of its intention to impose sanctions on every attorney who signed discovery responses it they were found to be improper or abusive.  Based on its review of the discovery responses the court determined that numerous discovery responses, from both sides, were improper.

According to Judge Bennett, the improper objections included language such as: “not reasonably calculated to lead to the discovery of admissible evidence,” “subject to and without waiving its general and specific objections,” “to the extent they seek information that is protected from discovery under the attorney-client privilege, the attorney work-product doctrine or is otherwise privileged or protected from disclosure,” and the ubiquitous “overbroad and unduly burdensome.”

The court stated that “boilerplate” objections obstruct the discovery process, violate the rules of civil procedure and ethics and imposes undue costs on the litigants.  The court then evaluated each “boilerplate” objection.  First, the court noted that an objection that a discovery request is premature is baseless as the discovery was propounded after the time specified in Rule 26 and there is no limitation on the sequence of discovery.  Similarly, an objection based on privilege without providing a log or list of the withheld documents is deficient and “hamper[s], rather than facilitate[s]” the issue of privilege in discovery.

The court also held that many of the objections lacked the specificity required under Rules 33(b)(4) and 34(b)(2) and failed to articulate with specificity the lack of relevance or undue burdensome under Rule 26(b)(1).  For example, an objection must articulate how or why the request is not relevant, overly broad, or unduly burdensome.  Similarly, simply stating a response is “subject to” one or more general objections does not satisfy the “specificity” requirement as it fails to identify for the propounding party which general objection is applicable, whether documents are being withheld, or whether the response is complete.  The court summarily dismissed counsel’s argument that if it failed to utilize general objections it could waive its rights.  Rather, the court noted the failure of a party to specifically identify its objections and what was withheld did not preserve any rights.  Further, a solution to such an issue would be to meet and confer with opposing counsel about the concerns or request an in camera review by the magistrate who could determine whether the documents in question were discoverable.

Although the court held that both parties had engaged in clear discovery abuse through the use of “boilerplate” objections, it declined to impose sanctions.  Instead, the court reviewed the history of counsel and noted that in this case, counsel did not use the objections as a way to impede discovery, but rather took every step to confer and cooperate during the discovery process (other than their use of the “boilerplate” objections).  The court also observed that because the parties were able to work out almost every discovery dispute,  “their boilerplate responses were completely unnecessary.”

In an effort to forestall future issues with “boilerplate” objections, the court noted that its new Trial Management Order advises parties that “in conducting discovery, form or boilerplate objections shall not be used and, if used, may subject the party and/or its counsel to sanctions.” The court “encouraged” all lawyers to request opposing counsel withdraw “boilerplate” objections and if counsel refuses to withdraw such objections, to go to the court and seek relief in “the form of significant sanctions.”  The court also urged judges to apply increasingly severe sanctions when such form objections were brought to their attention.

This case underscores the importance of ensuring objections to discovery requests are specific, based on the rules and made in good faith.  As the courts continue to deal with the ongoing and seemingly never ending issue of discovery disputes, particularly in the ever increasing world of e-discovery, the failure to follow the rules and engaging in “boilerplate” or form objections may result in severe consequences.

California Court Compels Defendant to Re-Produce Electronically Stored Information in Format Requested by Plaintiffs

A California federal trial court has granted the plaintiffs’ motion to compel re-production of electronically stored information (“ESI”) in native format with all associated metadata, while also granting plaintiffs their “reasonable expenses” incurred, including attorneys’ fees, in making their motion.  In Morgan Hill Concerned Parents Ass’n v. Cal. Dep’t of Educ., No. 2:11-cv-3471 KJM AC (E.D. Cal. Feb. 1, 2017), the court rejected the defendant’s argument that a requesting party cannot demand production in a specific format that would ease the requesting party’s review process, finding that such an argument runs directly counter to Rule 34(b)(1)(C) of the Federal Rules of Civil Procedure.  The court held that requesting production in a specific format to facilitate the “ease of review” is exactly what is contemplated by the rules.

In reaching its decision, the court emphasized that the producing party cannot ignore a request to produce ESI in a specific format, even if the production is in a “usable form” and paired with “essential metadata.” Rather, the court explained that Rule 34(b)2)(E)(ii) only permits production in a “reasonably usable form” if the request does not specify the form for production.  Because the plaintiff did specify the form of production in this case, the court held that there was no basis for defendant to ignore this request.

The court also rejected the defendant’s argument that requiring it to re-produce documents in native format would be an undue burden, ruling that “this is a problem of [defendant’s] making.  Had the defendant complied with plaintiffs’ requested format for production in the first instance, it would not have had to produce the documents twice.  Alternatively, the court noted, defendant could have timely objected to the production format requested by plaintiff and proposed to produce the ESI in its own chosen format.  Even if plaintiffs were likely to deny this proposal, it would have allowed the parties to meet and confer on what format would be used and what metadata would be produced prior to the initial production.  If the meet and confer proved futile, the issue could have been briefed to the court before production, as opposed to after.

Finally, the court also rejected the defendant’s argument that production of the documents in native format would infringe on the attorney-client privilege and work product doctrine.  The court held that defendant’s privilege objection was invalid because defendant had not produced a privilege log that complied with the federal rules.  Here, the defendant produced multiple versions of privilege logs, but none of them provided sufficient information for plaintiffs to determine the basis of defendant’s claimed privilege.  For example, the privilege logs did not indicate the subject of the communication or whether an attorney was included on the communication.  The court stopped just short, however, of finding that the defendant had permanently waived its assertion of the attorney-client privilege, granting the defendant 30 days to either produce all of the documents in question or produce adequate privilege logs, justifying the exclusion of specific documents from the native format production.

The takeaway from this case is that requesting parties have the right to specify the format of production of ESI.  If production of the documents in the requested format poses an undue burden for the producing party, it is the producing party’s burden to object to the specified format at the time it responds to the original request for production of documents and propose an alternative format for the production.  Failure to make a timely objection and counterproposal can result in the producing party waiving any such objections and being compelled to produce documents in the format specified by the requesting party, regardless of the burden to the producing party or whether the documents have already been produced in an alternate format.

Court Rejects Overly Broad Request For Forensic Imaging Of Plaintiff’s Personal Computers


An Illinois appellate court has vacated a trial court’s order compelling the forensic imaging of several personal computers used by plaintiff, applying a balancing test that takes into account both the proportionality rule and the privacy concerns implicated in the request.  In Carlson v. Jerousek, 2016 IL App (2d) 151248, P4 (Ill. App. Ct. 2d Dist. 2016), defendants in a personal-injury case moved to compel discovery of “electronically retrievable information,” ultimately asking the trial court for unrestricted access to inspect plaintiff’s personal computers, including a computer leased to plaintiff by his employer.

Carlson alleged that a brain injury affected his ability to complete tasks at work. The defendants argued that metadata from Carlson’s work computer would show them how long it took Carlson to complete tasks, and metadata from Carlson’s personal computer would indicate whether he stayed up at night playing computer games, demonstrating his ability to concentrate.  The defendants conceded that they did not know how to use the metadata but a “computer expert” would.  Although the trial court expressed skepticism about the broad nature of the requests, it entered an order requiring forensic imaging of the plaintiff’s computers.

The plaintiff sought reconsideration based on an affidavit from his employer’s in-house counsel, stating that the employer’s computer contained restricted information that could not be shared.  The trial court refused to consider the affidavit.

On appeal, the court noted that there is dearth of case law on forensic imaging and sought to fill in the gaps by examining the constitutional right to privacy, and applying the proportionality rule to electronic data.

In addressing privacy concerns, the appeals court found that the trial court should have considered the employer’s affidavit because it directly addressed the issue of private information.  The court noted that electronic discovery implicates privacy rights in a way that may sometimes seem “incomprehensible” to litigators, because of the sheer volume of information that can be stored on a computer. For example, even if a computer might contain some discoverable information, it might also contain large quantities of personal information or confidential business data.  On this basis, the appeals court found that the defendants were not entitled to such a “broad and intrusive” search.

As to proportionality, the appeals court explained that the proportionality requirement specifically targets the challenges posed by electronic discovery. Certain categories of data, such as data that is deleted, fragmented, ephemeral (such as random access memory), duplicative, or difficult to obtain without additional programming, is presumptively undiscoverable unless the requesting party can justify it.  To evaluate such a request, the court established a framework requiring the requesting party to show that:  (1) there is a compelling need for the information; (2) the information is not available from other sources; and (3) the requesting party is using the least intrusive means to obtain the information.

Noting that the defendants’ showing did not adequately address this framework, the court held the trial court erred by not applying the correct analysis. The defendants’ requests, the court said, were “vague and ambiguous,” and at a minimum, they should have involved an expert from the beginning to formulate search terms and narrow the scope.  The court also pointed out that the potential utility of the information was outweighed by the burden imposed by forensic imaging.  And finally, the court noted the lack of evidence that the computers were likely to contain the evidence that defendants contended could be relevant.  In other words, the searches might turn up nothing.

The takeaway from this case – which surveys a number of cases from other jurisdictions – is that blanket requests for forensic imaging probably will not be approved without very specific parameters that describe the relevance of the information, the precise method for obtaining it, and the reason that the information cannot be obtained elsewhere. Litigants who wish to undertake such discovery should be prepared to articulate a significant need for the data sought, and to show that imaging is truly warranted under the circumstances of the case.  Litigants opposing intrusive e-discovery should consider whether they can oppose aggressive e-discovery based on the various factors discussed in the majority opinion.

Court Rules That Proportionality And Cooperation Are Essential In Resolving E-Discovery Disputes

Magistrate Judge R. Steven Whalen agreed with UPS that it did not have to spend six months and $120,000 to recover data stored on backup tapes that may not be relevant to the case if UPS prevails in its efforts to limit the scope of the putative class’s claims.  Instead, the Court directed the parties to share information and agree upon an appropriate methodology for statistical sampling.

In Solo v. United Parcel Services Co., No. 14-12719, 2017 U.S. Dist. LEXIS ______ (E.D. Mich. January 10, 2017) a putative class of shipping customers alleged that UPS breached its shipping contracts by repeatedly overcharging for shipments with a declared value of more than $300.  Plaintiffs made what they likely believed to be a reasonable request – how many packages with a declared value of more than $300 were shipped within the several years covered by Plaintiffs’ claims?

UPS argued that the request was excessively burdensome.  A UPS manager stated due to the sheer volume of packages the company shipped it maintained only six months of “package level detail” in readily-available, or “live”, form.  After six months, the information was archived onto back-up tapes.  According to UPS, extracting usable data from the archived information would require custom software, take six months, and have an estimated cost of $120,000.  Instead of producing the full scope of requested information, UPS produced an estimated number of packages for a period in 2013 based on a method that extrapolated “live” data from a more recent period.

The Court looked at two discovery concepts set forth in the 2015 amendments to the Federal Rules of Civil Procedure to decide the issue—cooperation and proportionality.  First, Rule 1 places a heightened duty of cooperation on the parties for procedural matters like discovery.  Second, Rule 26(b)(1) emphasizes that discovery should be proportional to the needs of the case.  The Court noted that the Advisory Committee notes explicitly linked the two concepts, writing that “Effective advocacy is consistent with—and indeed depends upon cooperative and proportional use of procedure.”

As to proportionality, the Court held that UPS had met its burden to show that the requests were “extraordinarily burdensome” by explaining that most of the requested data was not readily-accessible and that there would be a substantial cost in making it available.  The Court further noted that the relevance of Plaintiffs’ request was not proportional to the needs of the case at the time.  UPS was actively seeking to limit the scope of the case based on arbitration agreements and a 180-day window for customers to file complaints.  The Court noted that if UPS was successful on its motions, then the burden and expense of retrieving much of the requested information “will have been for naught.”

With regard to cooperation, the Court noted that Plaintiffs’ counsel had not been privy to the details of UPS’ sampling methodology because it involved proprietary data.  So the Court entered a protective order allowing UPS to disclose information on an “attorneys eyes only” basis.  With that exchange, the parties can work cooperatively to determine the appropriate balance between burden and benefit of the requested discovery.  If Plaintiffs are not satisfied with UPS’ sampling methodology, the Court directed the parties to “meet, confer, and agree on a mutually acceptable sampling methodology.”  While the Court generally endorsed the use of statistical sampling, it left open the possibility that Plaintiffs could request the full scope of the information for a relevant period of time, “with Plaintiff bearing the entire cost of production.”

This case adds to the long list of opinions emphasizing the importation of both cooperation and proportionality in the electronic discovery process.  Courts are increasingly expecting parties to share the “how” and “why” behind their discovery objections with the opposing party so that the parties can work together to determine an appropriate balance between the expected benefits of electronic discovery and the costs of producing electronically-stored information.

Lack Of Prejudice Results In Limited Sanction Against Defendant

In one of the first cases interpreting newly amended Fed. R. Civ. P. 37, F.T.C. v. DirecTV, Inc., 15-cv-01129-HSG, 2016 U.S. Dist. LEXIS 176873 (N.D. Cal. Dec. 21, 2016), Magistrate Judge Maria Elena James of the Northern District of California denied plaintiff’s motion to exclude spoliated evidence that was relied upon by defendant’s expert, reasoning that the plaintiff failed to show sufficient prejudice to warrant such a sanction.  The Court, however, did order that defendant’s expert sit for a four hour deposition to cure any prejudice resulting from defendant’s failure to engage in “best practices” related to the preservation of such evidence.

This is a lawsuit about DirecTV’s online marketing tactics. More precisely, plaintiff, the Federal Trade Commission (FTC), claims that defendant, DirecTV, deceptively and unfairly advertises its subscription services to consumers, in violation of the Federal Trade Commission Act (“FTC Act”) and the Restore Online Shoppers’ Confidence Act (“ROSCA”).

In its motion for sanctions under Fed. R. Civ. P. 37(e)(1), the FTC argued that despite being on notice since 2010, DirecTV failed to preserve three categories of ESI related to its website.

Interactive Versions of 2015 DirecTV website

The FTC argued that DirecTV did not preserve interactive versions of its 2015 website, which were relied upon by DirecTV’s expert. DirecTV responded by stating that it informed the FTC in June 2010 and February 2014 that it was not preserving all versions of its interactive website because it was technologically infeasible to do so.  Instead, in August 2013, DirecTV advised the FTC that it would produce monthly screenshots of its website, and ultimately made available source code and two 30(b)(6) experts on such code that would supposedly enable the FTC to reconstruct the website.

2011 – 2015 A/B Tests

The FTC also argued that DirecTV failed to preserve “thousands” of A/B tests that it conducted from 2011 until 2015. “A/B testing refers to the common practice of presenting different experiences to subsets of consumers and analyzing how consumers respond.”  DirecTV’s failure to preserve this ESI, the FTC argued, prejudiced its ability to compare DirecTV’s litigation evidence with similar evidence prepared in the ordinary course of business and has deprived the FTC of an opportunity to commission a counter-study.  DirecTV countered by explaining that it produced the single A/B test mentioned in its expert’s report and reminded the court that the parties already resolved this dispute in July 2016 when DirecTV agreed to produce other records relating to its consumer research studies.

Website Analytics Data

Finally, the FTC argued that DirecTV failed to preserve analytics data on the behavior of users navigating the company’s website. Without this data, the FTC argued that DirecTV should be precluded from using it to defend the case.  DirecTV responded by attacking the FTC’s delay in recognizing and raising this issue, and also alleged that the dispute was similarly resolved by the parties’ July 2016 agreement on consumer research studies.

In deciding the issue, the court stated that “[w]hile DIRECTV’s decisions may not constitute best practices, the Court finds that the FTC ultimately has not shown that it has been prejudiced to warrant exclusion of the information.” With regard to DirecTV’s failure to preserve interactive versions of its website for the time period used in the consumer surveys, the court stated that while plaintiff “may have preferred” preservation and production in a different format, plaintiff failed to show that DirecTV’s production of screenshots and source code was inadequate for its purposes.  With regard to the A/B tests, the court chastised plaintiff’s argument that “potentially relevant” data was lost, citing amended Rule 26(b)(1) to explain that the FTC was only allowed to seek information relevant to the claims and defenses, not information that “may lead to the discovery of admissible evidence,” an obsolete standard.  Finally, with respect to alleged lost website analytics, the court rejected plaintiff’s plea for evidence exclusion, noting the FTC’s delay in seeking sanctions on this issue and the lack of evidence that FTC’s experts needed additional data to evaluate defendant’s expert report.

Ultimately, the court denied the FTC’s request to exclude these categories of ESI, but did order that DirecTV produce its expert for a four hour deposition “should the FTC find this option useful” because the FTC was entitled to “confirm that the information [defendant’s expert] relied upon is consistent (in all material respects) with information from different time periods.”

The court’s refusal to impose a more severe sanction such as evidence exclusion highlights Rule 37(e)(1)’s requirement that the moving party has a burden to show prejudice. Further, the case reaffirms the rule’s directive that courts fashion remedies “no greater than necessary” to cure whatever prejudice identified.

Forensic Examination of Plaintiff’s Electronic Devices Disallowed Because It Was Not Proportional To The Needs of the Case

District Court Judge Jorge L. Alonso recently upheld Magistrate Judge Michael T. Mason’s ruling in a sex discrimination and hostile work environment case that forensic examination of a plaintiff’s electronic devices was not proportional to the needs of the case because any benefit the inspection might provide would be outweighed by the plaintiff’s privacy and confidentiality interests. 

At issue in Hespe v. City of Chicago et al., No. 13 C 7998, 2016 BL 417422 (N.D. Ill. Dec. 15, 2016) was the defendants’ request to inspect the plaintiff’s electronic devices for unproduced electronic communications between the plaintiff and her supervisor, the alleged harasser.  In response to discovery requests, the plaintiff had produced 850 text messages she had received from her supervisor.  The defendants later learned during the depositions of the plaintiff and her mother that the plaintiff’s mother was in possession of thousands of additional voice mail and text messages that the plaintiff had forwarded to her mother for safekeeping because she was running out of storage space on her computer.  In response to a subpoena, the plaintiff’s mother then produced 5,748 text messages, a number that dwarfed the 850 plaintiff had produced in the case.

The Court granted the defendants leave to depose the plaintiff for three additional hours to examine her with respect to the newly produced text messages.  Based on the plaintiff’s deposition testimony about the manner and completeness of her production of the text messages, the defendants took the position that they could not rely on the plaintiff’s representation that she had produced all of the ESI documenting her communications with her supervisor.  The defendants, therefore, moved to compel a forensic examination of the plaintiff’s electronic devices to search for unproduced ESI and attempt to recover any relevant ESI that may have been deleted.

Magistrate Judge Mason denied the motion to compel holding that “the requested forensic inspection of plaintiff’s electronic devices was not proportional to the needs of the case, especially considering plaintiff’s privacy and confidentiality interests in her personal devices.”  Noting that forensic inspection is not a routine right of discovery but rather an extraordinary remedy requiring a showing of good cause, District Court Judge Alonso affirmed Judge Mason’s ruling under Fed. R. Civ. P. 26 (b)(1) holding that defendants had not demonstrated that the contents of plaintiff’s devices were likely to go “to the heart of [the] case” (such as in trade secret cases) nor provided any compelling reason to believe that the plaintiff’s production was incomplete.  In so holding, Judge Alonso noted that the defendants had not requested to search for any specifically identified text messages with particular content shown to have existed at one point and that, if found, would conclusively resolve a contested issue in the case.  Since the issue of whether the forensic inspection might recover any lost or deleted ESI appeared to be little more than speculative, the Court found such an examination to be disproportionate when weighed against the plaintiff’s privacy interests.

 This case underscores that a party must show good cause to obtain a forensic examination of all the information on a person’s electronic device when it believes an opposing party’s production of ESI to be incomplete.  Good cause can be established by evidence that an opposing party’s search for relevant ESI was unreasonable and critical information was not produced.  Good cause also can arise from intentional spoliation where the remedy is part of a sanction. See Cohn v. Guaranteed Rate, Inc., No. 1:14-cv-9369, 2016 BL 408763 (N.D. Ill. Dec. 8. 2016).  Absent such a showing, as this case demonstrates, a Court likely would find a forensic examination to be disproportionate under Fed. R. Civ. P. 26 (b)(1).

 

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