ELECTRONIC DISCOVERY LAW:  e-discovery
DISCOVERY OF
ELECTRONIC DATA
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PRELIMINARY & EMERENCY
ELECTRONIC DISCOVERY
Presevation Orders

E- DISCOVERY PRESERVATION ISSUE : electronic data destruction in normal course
PRESERVATION LETTER RE ELECTRONIC DATA asap prior to actual litigation
PRESERVATION DUTY RE ELECTRONIC DATA [Spoliation and Sanctions]

General background

Elements
Scope of Preservation Duty
See also Sanctions and Spoliation outline re case law

FOLLOW-UP DISCOVERY TO DETERMINE AND ASSURE COMPLIANCE
EXPEDITED DISCOVERY
EX PARTE ORDERS: preservation order; seizure or copy and preservation
PROTECTIVE ORDERS for preservation of electronic evidence on noticed motion
PRESERVATION ORDER TERMS: What is reasonable restraint ?
COST SHIFTING ON PRESERVATION ORDER

PRELIMINARY AND EMERGENCY DISCOVERY / PRESERVATION OF ELECTRONIC EVIDENCE

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PROBLEM:
Data destruction in normal course + ease of modification or erasure
The need for prompt actions to preserve data imposes a duty on both sides: the party seeking data must act with diligence to obtain the preservation and discovery of relevant evidence; the party with potential evidence must assure that it is preserved.  The party seeking evidence should notify the other side by preservation letters, in early meet and confer sessions, and by the diligent pursuit of discovery as to the scope of issues, the types of information it seeks and the likely sources of such information so that the other side is clearly on notice of its obligations.  The party with such inforation must be proactive and diligent in the  preservation, search and production of it.

See above re Antioch Co. v. Scrapbook Borders Inc. (D.Minn. 2002), 2002 WL 31387731 [concern re overwriting of "deleted" data by normal computer operation resulted in court granting order for mirror image or all computer hard drives of small business]

Creation & modification of files on a computer system

Additional information: file dates of creation, modification, access or deletion
Information as valuable as the text or data included in the file itself
Continued use of a computer system includes the risk that these dates will be changed.

Continued use alters or destroys evidence:

Automatic file management programs that routinely delete inactive files
Turning the computer on/off
Entering new data
Load new software
Data compression
Disk defragmentation
Disk optimization routines [may be necessary & routine to run]
Migration of data from system to new system may result in lost data

Evidence admissibility problems

Modifications may not be detected
Delay in preservation may create concern that undetected modifications have occurred and documents are unreliable and possibly unauthenticated and inadmissible even if no modification has occurred

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PRESERVATION LETTER asap prior to actual litigation
The term refers to letters sent, usually by counsel, to opponents alerting them to a claim and potential litigation and requesting that they preserver relevant and discoverable infomation. They may be sent prior to litigation or at any stage.  They do not by themselves create duties but they provide notice and can provide specificity regarding the scope of the claim, the likely witnesses and other sources of information, the type of information to be preserved, and similar matters such that opponents cannot claim ignorance should evidence be lost or destroyed.  Specificity is desired and the letter should not be so broad or so lengthy as to become unduly burdensome, ambiguous or abusive.

Creates notice, duty to preserve, and basis for claim for sanctions or spoliation
Specify information & possible location: data files, emails, calendars, telephone logs, access lists, audit trails, computer logs; network file or email servers, mainframes, PC and work stations, offline storage
Specify types of electronic media and other documents to be preserved: data base and related structural information; file remnants, residual and hidden data, replaced computers, hard drives or storage media
Identify key individuals by name or capacity & include secretaries, assistants, and colleagues
Advise re danger of inadvertent destruction and duty to preserve
Request cease activities until mirror image copies are made of relevant data
Request preservation of backup tapes and stop rotation of tapes
Request mirror images and prohibition on defragmentation, compression, or reformating
Request immediate backup and archive of two copies of all relevant data
Send a similar letter to your own client; expect reciprocity and application of same standards
Follow-up with more specific requests as knowledge of issues and adversary's records increases

Frey v. Gainey Transp. Services, Inc. (N.D.Ga.,2006), Slip Copy, 2006 WL 2443787. Failure to preserve GPS tracking information after receipt of a detailed, broad, 15 page preservation letter prior to a lawsuit did not result in spoliation sanctions.

Turner v. Resort Condos. Int'l., LLC. (S.D.Ind. 2006), 2006 U.S. Dist. LEXIS 48561 While granting summary judgment the court criticized an overly broad form preservations letter ("demanding that RCI for an indefinite time not modify or delete any electronic data in any mainframe, desktop, or laptop computers, or other storage media or devices, and not upgrade or replace any equipment or software. [and] that RCI immediately copy hard drives on personal computers and save any data created after the letter was received").

Wiginton v. CB Richard Ellis  229 F.R.D. 568  (N.D.Ill.,2004).The court noted that a preservation letter does not create a duty to preserve except that it puts the opponent on notice of the scope of its legal obligations. Sanctions denied without prejudice to renewal upon a showing of harm resulting from a failure to preserve destroyed documents based on evidence from existing records in order to formulate appropriate sanctions proportionate to the offense. Sexual harassment case preceded by administrative complaint. Case filed and followed by preservation letter two days later. Def. immediately sent email to all personnel to preserve records re plaintiff. Eight months later the parties stipulated to a more inclusive preservation letter and a month later to a presevation order. During this period, defendant followed its normal document retention/destruction policy and back up tapes and documents from hard drives were lost. The Magistrate Judge discussed the duty to preserve and spoliation noting that extraordinary measures are not required but that documents "reasonably likely to be the subject of a discovery request" must be preserved. Defendant had a duty to suspend or alter its document destruction to preserve potential evidence. It noted that defendant was on notice that electronic documents would be the subject of discovery nine months before the action was filed and when the EEOC complaint was filed. It found that the initial notice to employees to preserve was too narrow in that it restricted preservation to ducuments regarding plaintiff and should have covered alleged harassers, offices involved, and sexual harassment environments.

Frey v. Gainey Transp. Services, Inc. (N.D.Ga.,2006), Slip Copy, 2006 WL 2443787. Failure to preserve GPS tracking information after receipt of a detailed, broad, 15 page preservation order prior to a lawsuit did not result in spoliation sanctions.

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PRESERVATION DUTY

The duty to preserve evidence has long been recognized as an essential part of any legal system in that, like perjury, it strikes at the core of the system.  The violation may be a crime, in some states it is an independent tort, and it may result in discovery sanctions from adverse inferences to adverse judgment. In modern discovery practice it has a direct impact on the duty and scope of a document retention/destruction policy and discovery sanctions and spoliation .
Recognized by early case law in the United States:

See The FORTUNA---Krause et.al.Claimants (March 17, 1817), 15 U.S. 161, 4 L.Ed. 209, 2 Wheat 161, 1817 U.S. LEXIS 394 [ship seizure; concealment of documents may result in adverse inference or adverse determination]

E-Discovery & Spoliation

GENERAL---What is its source?  What is it?  When does it arise?  What are the consequences for violations?

ALTERNATIVE SOURCES giving rise to duty to preserve potential relevant evidence

Case law duty arising from potential litigation
Statutory or regulatory obligations to preserve
Statutes of limitations  as  suggesting  limits
A.B.A. Civil Discovery Std. 10 & 29(a)(i) (1999)

Duty created by knowledge of potential litigation [See Zubulake IV. SDNY 10/22/03; Thompson v. U.S.H.U.D.(D.Md 2003)]
Duty created by preservation letter [See Wiginton v. CB Richard Ellis (N.D. Ill 10/24/03)[ letter doesn't create duty but provides  notice]
Duty created by discovery request [see Stevenson v. Union Pacific Railroad Company (8th Cir. 1/5/04) 2004 U.S. App. LEXIS 6]
Duty created by court's protective order or injunction

PRESERVATION DUTY [Spoliation and Sanctions]

The FORTUNA---Krause et.al.Claimants (March 17, 1817), 15 U.S. 161, 4 L.Ed. 209, 2 Wheat 161; 1817 U.S. LEXIS 394; [ship seizure; concealment of documents may result in adverse inference or adverse determination]

A.B.A. Civil Discovery Std. 10 & 29(a)(i)

10. The Preservation of Documents.When a lawyer who has been retained to handle a matter learns that litigation is probable or has been commenced, the lawyer should inform the client of its duty to preserve potentially relevant documents in the client’s custody or control and of the possible consequences of failing to do so  . . ...it is counsel’s responsibility to advise the client as to whatever duty exists, to avoid spoliation issues.

29. 1999 Version.   Preserving and Producing Electronic Information.
a. Duty to Preserve Electronic Information.
i. A party's duty ... also applies to information contained or stored in an electronic medium or format, including a computer word-processing document, storage medium, spreadsheet, database and electronic mail.

29. The 2004 version lists numerous "types of data" to preserve, elaborates on factors to consider in requiring discovery or cost shifting , and otherwise addresses concerns regarding e-data.

Mastercard Intern., Inc. v. Moulton 2004 WL 1393992 (S.D.N.Y.)   [Spoliation based on gross negligence was found when defendant continued its 21 day e-mail deletion policy which probably resulted in the destruction of potentially relevant e-mails after the lawsuit was filed, after opposing counsel "reminded" defendant of its duty, and after discovery was served encompassing the e-mails. "In this case, defendants' failure to preserve the e-mails plainly constituted at least gross negligence in light of (a) the pendency of the case, (b) their attorney's advice to Kevin Moulton to preserve evidence and (c) the specific nature of plaintiff's document request." ... "As for culpability, we are not persuaded that defendants acted in bad faith, that is, for the express purpose of obstructing the litigation. They appear simply to have persevered in their normal document retention practices, in disregard of their discovery obligations." The lesser remedy was granted permitting plaintiff to "argue to the trier of fact that this destruction of evidence, in addition to other proof offered at trial, warrants the inferences that the public was confused and that the MasterCard marks were diluted and tarnished."

Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 ( S.D.N.Y.2003)aka Zubulake IV. Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted. Preservation duty arose, 10 months prior to litigation and 4-5 months prior to filing of formal complaint with EEOC, at the time the immediate supervisor and other key employees reasonably anticipated litigation. At that time "...it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents."

Linnen v.A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 ["A litigant has a duty to preserve evidence." Townsend v. American Insulated Panel Co., Inc., 174 F.R.D. 1, 3 (D.Mass.1997); Corales v. Sea- Land Service, Inc., 172 F.R.D. 10 (D.P.R.1997). Spoliation of evidence occurs when there has been negligent or intentional destruction of physical evidence which results in some unfair prejudice to the opposing party. Kippenham v. Chaulk Services, Inc., 428 Mass. 124, 127, 697 N.E.2d 527 (1998). Potential sanctions for the destruction of evidence may include dismissal of the case, the exclusion of evidence, or a jury instruction on the "spoliation inference." Townsend, 174 F.R.D. at 2."]

See also Trigon Ins. Co. v. United States (E.D.Va. 2001), 204 F.R.D. 277 [Duty from knowledge that documents would have to be produced and from informal and formal requests. The court carefully examined the facts and awarded full monetary sanction for consequences of spoliation including payment for computer forensic expert to recover documents, excluded expert when spoliation prevented adequate cross examination, and allowed adverse inferences against another expert when recovery of spoliated documents permittted cross exam. At page 291, "Considering the degree of culpability, the quantum of prejudice and the least severe but most effective, sanction...."]

Thompson v. United States Department of Housing and Urban Development (D.Md 12/12/03), #MJG-95-309 (Magistrate Judge Paul W.Grimm) Court ruled e-mail had been requested, was discoverable & ordered production. After non-compliance, sanctions were imposed  but later reduced. In the course of the opinion the court discussed the nature of electronic data and the approaches to discovery cost/benefit analyses, the duty to preserve evidence, and spoliation. The court notes that the duty to preserve arises when a party reasonably should know that the evidence may be relevant to anticipated litigation; at that point a litigation hold is required especially for key players. 

United States v. Koch Industries Inc.(N.D. Okl.1998), 197 F.R.D. 463, 482

California

See Spoliation in case outline on Sanctions

Smith v. Superior Court (1984), 151 Cal.App.3d 491 [Original Calif. independent tort spoliation case. Car dealer that had altered vehicle and to whom it was towed after the accident agreed to maintain the vehicle pending further investigation.]

Cedars-Sinai Medical Ctr. v. Superior Court (1998), 18 Cal.4th 1, 12 [Independent cause of action for tort rejected in favor of resoving matter in pending litigation. Dictum: "Destroying evidence in response to a discovery request after litigation has commenced would surely be a misuse of discovery within the meaning of section 2023, as would such destruction in anticipation of a discovery request." ]

See Willard v. Caterpillar (1995), 40 Cal.App.4th 892 [In pre Cedars-Sinai case, trial court reversed for allowing claim against defendant for intentional spoliation of design documents to go to jury; After discussing cases, the court notes at page 922 that "these cases demonstrate the 'common understanding of society' regarding the wrongfulness of evidence destruction is tied to the temporal proximity between the destruction and the litigation interference and the foreseeability of the harm to the nonspoliating litigant resulting from the destruction." The court noted at p. 919 that there was no statutory or regulatory duty to preserve documents and that defendant acted in good faith pursuant to a reasonable document destruction policy. Court balances various elements of tort and cites many of the federal sanction cases in discussing theoretical basis for spoliation; Intentional spoliation by party as separate tort no longer viable in California per Cedars-Sinai case infra]

Temple Community Hospital v. Superior Court (1999) 20 Cal.4th 464, 476-7 [In holding that an independent tort of spoliation as to 3d parties does not exist in California, the Supreme Court observed the limited statutory sanctions available against 3rd parties and suggests that any duty of a non-party to preserve must be based on contract or statute:

"We observe that to the extent a duty to preserve evidence is imposed by statute or regulation upon the third party, the Legislature or the regulatory body that has imposed this duty generally will possess the authority to devise an effective sanction for violations of that duty. To the extent third parties may have a contractual obligation to preserve evidence, contract remedies, including agreed-upon liquidated damages, may be available for breach of the contractual duty. Criminal sanctions, of course, also remain available. If existing remedies appear limited, that may well be because third party spoliation has not appeared to be a significant problem in our courts. After all, the nonparty who is not acting on behalf of a party but is independently motivated to destroy evidence with the intent to interfere in the outcome of litigation between other parties must be a rarity, perhaps because such destruction can subject the nonparty to criminal prosecution."]

Evidence Code §412, 413 jury inferences

Penal Code §135 obstruction of justice

See Smith v. Superior Court (1984), 151 Cal.App.3d 491 at p.497 [Original spoliation case in Calif. discussing principle that criminal statute does not create civil right but that civil and criminal prohibitions may apply to the same acts]

See Agnew v. Parks(1959), 172 Cal.App. 2d 756, 766 re no civil case for perjury after prior trial for med mal.

Spoliation exception to litigation privilege. Civil Code §47(b)(2)

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ELEMENTS OF PRESERVATION DUTY

PRESERVATION POLICY:  See    DOCUMENT RETENTION POLICIES.   A rule of thumb is that every person or entity should adopt, follow, enforce and document its policy and compliance, though courts have not required it.  Lack of any policy indicates a failure to enforce the duty to preserve similar to a failure to acutally enforce an existing policy that has been adopted.

TIMING:  Know or should know importance---continuum of notice that gives rise to duty:

Destruction years prior to litigation

Willard v. Caterpillar (1995), 40 Cal.App.4th 892 [tr ct rev'd for allowing claim of intentional spoliation of design documents to go to jury; After discussing cases, the court notes at page 922 that "these cases demonstrate the 'common understanding of society' regarding the wrongfulness of evidence destruction is tied to the temporal proximity between the destruction and the litigation interference and the foreseeability of the harm to the nonspoliating litigant resulting from the destruction. There is a tendency to impose greater responsibility on the defendant when its spoliation will clearly interfere with the plaintiff's prospective lawsuit...."

Prelitigation discussions, demands, and agreements

In re Napster, Inc. Copyright Litigation (N.D.Cal.2006), Slip Copy, 2006 WL 3050864. In multiple lawsuits involving Napster, the duty of an investor to preserve evidence first arose when it was told it would be sued if it failed to comply with an injunction against current defendants. Knowledge of lawsuit against and common interest with defendant plus the threat was sufficient to create a duty. The duty continued after one lawsuit naming it as a defendant was dismissed due to the matrix of facts including continued litigation against other investors on the subject, threats, seeking indemnification when selling its interest in defendant, seeming admissions of likelihood of suit.   " ... The duty to preserve documents attaches 'when a party should have known that the evidence may be relevant to future litigation.' The future litigation must be 'probable,' which has been held to mean 'more than a possibility.' "

Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 ( S.D.N.Y.2003)aka Zubulake IV.Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted. Preservation duty arose, 10 months prior to litigation and 4-5 months prior to filing of formal complaint with EEOC, at the time the immediate supervisor and other key employees reasonably anticipated litigation.

Smith v. Superior Court (1984), 151 Cal.App.3d 491 [Original Calif. spoliation tort case. Car dealer that had altered vehicle and to whom it was towed after the accident agreed to maintain the vehicle pending further investigation.]

Preservation letter: notice of duty to preserve and basis for claim for sanctions or spoliation
Claim [See Zubulake IV re claim to EEOC 5 months prior to litigation "at the latest" re preservation duty]
Complaint

Mastercard Intern., Inc. v. Moulton 2004 WL 1393992 (S.D.N.Y.)
Spoliation based on gross negligence was found when defendant continued its 21 day e-mail deletion policy which probably resulted in the destruction of potentially relevant e-mails after the lawsuit was filed, after the complaint was filed,  after opposing counsel "reminded" defendant of its duty, and after discovery was served encompassing the e-mails. "In this case, defendants' failure to preserve the e-mails plainly constituted at least gross negligence in light of (a) the pendency of the case, (b) their attorney's advice to Kevin Moulton to preserve evidence and (c) the specific nature of plaintiff's document request." ... "As for culpability, we are not persuaded that defendants acted in bad faith, that is, for the express purpose of obstructing the litigation. They appear simply to have persevered in their normal document retention practices, in disregard of their discovery obligations." The lesser remedy was granted permitting plaintiff to "argue to the trier of fact that this destruction of evidence, in addition to other proof offered at trial, warrants the inferences that the public was confused and that the MasterCard marks were diluted and tarnished."

Skeete v. McKinsey & Company, Inc., 1993 U.S.D. LEXIS 9099, 10 (SDNY 1993)]
Danis v. USN, 2000WL 1694325 (N.D.Ill,2000)
United States v. Koch Industries Inc.(N.D. Okl.1998), 197 F.R.D. 463 [deposition testimony in other cases; Congressional inquiry]
Tulip Computers International B.V. v. Dell Computer Corporations (D.Del.2002), 2002 WL 818061 ["...once Dell had knowledge of this case, it had an affirmative obligation to preserve potentially responsive documents...." In denying an order preventing Dell from destroying any further documents the court noted that "...there is no evidence of bad faith on Dell's part...."]

Discovery request

Cedars-Sinai Medical Ctr. v. Superior Court (1998), 18 Cal.4th 1, 12 [Dictum: "Destroying evidence in response to a discovery request after litigation has commenced would surely be a misuse of discovery within the meaning of section 2023, as would such destruction in anticipation of a discovery request." Independent spoliation tort rejected.]

Linnen v.A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 [The language of the document request makes it clear that the plaintiffs sought the production of items such as the system back-up tapes and, after receiving this request, the defendants had an obligation to preserve any such documents or materials.]

Discovery motion
Discovery order

Prudential Ins. Co. of Am. Sales Practices Lit., 169 F.R.D.598;

Linnen v.A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 4620151997)

Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 ( S.D.N.Y.2003) aka Zubulake IV.Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted. Preservation duty arose, 10 months prior to litigation and 4-5 months prior to filing of formal complaint with EEOC, at the time the immediate supervisor and other key employees reasonably anticipated litigation. At that time "...it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents." ]

Computer Assoc. Intn'l. v American Fundware Inc.(Colo.DC 1990), 133 F.R.D. 166 [def. common practice was to only retain current source code; continued destruction even after discovery request; default judgment entered for destroying source code in copywrite case]

Wm. T. Thompson v. General Nutrition Corp (CD Cal. 1984) 593 F.Supp.1443, 1455.

Capellupo v. FMC Corp., 126 F.R.D.545, 551 (D. Minn.1989)

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SCOPE OF PRESERVATION DUTY

A.B.A. Civil Discovery Std. 29  provides a list of electronic data that should be considered for preservation

Relevance:

Reasonably likely to be subject of discovery request
Degrees of relevance: critical, central issue, discovery relevance
Degree of relevance likely to affect ultimate severity of sanction

SUBJECT MATTER PROTECTED

Potential evidence re potential issues and potential c/a
Subject matter relevancy
Obvious evidence vs peripheral evidence may affect sanction

DUTY OF COUNSEL TO BE PROACTIVE

DUTY TO INVESTIGATE

DUTY TO NOTIFY EMPLOYEES AND AGENTS

In re Napster, Inc. Copyright Litigation (N.D.Cal.2006), Slip Copy, 2006 WL 3050864. ['The obligation to retain discoverable materials is an affirmative one; it requires that the agency or corporate officers having notice of discovery obligations communicate those obligations to employees in possession of discoverable materials.']

National Ass'n of Radiation Survivors v. Turnage, 115 F.R.D. 543, 557 (N.D. Cal. 1987). ["The obligation to retain discoverable materials is an affirmative one; it requires that the agency or the corporate officers having notice of discovery obligations communicate those obligations to employees in possession of discoverable materials." The court imposed the following guidelines, restrictions and sanctions to govern future discovery:

Monetary sanctions & special discovery obligations imposed
Discovery signed by specified attorney & gen'l counsel
Discovery compliance plan
Notice of action to be circulated to all employees
Notice of obligation to preserve evidence and cooperate circulated to all employees
Special Master to oversee discovery

Procter & Gamble v. Haugen, 179 F.R.D. 622 (D. Utah 1998). [Monetary sanctions for failing to preserve e-mail messages of 5 employees known to be likely to have relevant information]
Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598 [effective notice to employees required]
Linnen v.A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 [employees notified by email and voice mail]
United States v. Koch Industries Inc.(N.D. Okl.1998), 197 F.R.D. 463 [duty to notify persons in tape library]

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LITIGATION HOLD
DUTY TO SUSPEND NORMAL BUSINESS PROCEDURES THAT ALTER OR DESTROY

In re Napster, Inc. Copyright Litigation (N.D.Cal.2006), Slip Copy, 2006 WL 3050864.
... Documents may be lost and overlooked in large-scale document production, but the abject failure to preserve an entire source of relevant evidence is sanctionable conduct. ***Once Hummer's duty to preserve took effect in June 2000, Hummer was required to suspend any existing policies related to deleting or destroying files and preserve all relevant documents related to the litigation.[citations] 'The obligation to retain discoverable materials is an affirmative one; it requires that the agency or corporate officers having notice of discovery obligations communicate those obligations to employees in possession of discoverable materials.'. Therefore, even if Hummer's "long standing policies" included deleting emails, Hummer was required to cease deleting emails once the duty to preserve attached in May 2000. Since Hummer acknowledges that it did not cease its document policy, the court may impose sanctions....

Reino de Espana v. American Bureau of Shipping (S.D.N.Y.,2006), 2006 WL 3208579
The trial court granted defendant's motion to compel production of e-mail and electronic documents and invited a further motion for discovery sanctions.  "It was incumbent upon [plaintiff] to identify and preserve relevant documentation related to its claims. The failure to conduct discovery in accordance with the Federal Rules and this Court's rules is sanctionable.***  "The record and the testimony offered at the evidentiary hearing, however, shows that [plaintiff] failed to place a timely and adequate litigation hold in its agencies and ministries."

Lewis v. School Dist. #70 (S.D.Ill.,2006), Slip Copy, 2006 WL 2506465   Litigation hold on auto deletion of e-mail and production in electronic form rejected.  The "e-mail server automatically removes e-mails not saved by the recipient to a specific folder after 14 days, and they are deleted with 10 days after that." Based on the facts of the case, the court rejected the argument that the program should have been suspended and a hold placed earlier noting "plaintiff relies on case law from the Southern District of New York, which is not controlling on this Court."
The court rejected an overbroad request and the argument that e-mails should have been produced in electronic form as requested rather than hard copy noting " it appears that defendants have made a reasonable attempt to provide responsive e-mails that are still in existence

Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 ( S.D.N.Y.2003)aka Zubulake IV  Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted. Preservation duty arose, 10 months prior to litigation and 4-5 months prior to filing of formal complaint with EEOC, at the time the immediate supervisor and other key employees reasonably anticipated litigation. At that time "...it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents." ]

Turner v. Hudson Transit Lines(SDNY 1991), 142 FRD 68,72[self inflicted inability to produce]
Wm. T Thompson v. General Nutrition Corp., Inc 593 F.Supp. at 1457

Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598 ["No comprehensive document retention policy with informative guidelines and lacks a protocol that promptly notifies senior management of document destruction. These systemic failures impede the litigation process and merit the imposition of sanctions."]
Wm. T. Thompson Co. v. General Nutrition Corp., Inc., 593 F. Supp. 1443,1455 (C.D. Cal. 1984)[details duties of corp and counsel to comply with discovery obligations generally]
National Ass'n of Radiation Survivors v. Turnage, 115 F.R.D. 543, 557(N.D. Cal. 1987)[details duties of corp and counsel to comply with discovery obligations generally]
Cedars-Sinai Medical Center (1998), 18 Cal.4th 1 [eliminates intentional spoliation as separate tort; 3d party destruction or late discovery open ques]

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FOLLOW-UP DISCOVERY TO DETERMINE AND ASSURE COMPLIANCE
Review and enforcement of preservation duties is required of both sides. The party seeking discovery wants to assure compliance and should incorporate such inquiries at all stages and with all deponents.  Courts have suggested that both counsel and the client have a duty to monitor and enforce their compliance with duties and with orders. 

Incorporate into each appropriate deposition
Basis for further document request
Basis for sanction or spoliation claim

Linnen v.A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 ["Finally, plaintiffs have requested that Wyeth be ordered to bear all fees and costs associated with the electronic mail discovery issue. In light of the uncooperative, be it unintended or willful, conduct by Wyeth in relation to the electronic mail discovery issue, the court rules that the imposition of such a sanction is appropriate. Plaintiffs' initial request for production of documents asked for any documents stored in the form of electronic, magnetic, or computer process in June of 1997. That request was reiterated more specifically in June of 1998. Plaintiffs doggedly pursued the issue despite letters from defendants' counsel in June and July of 1998 denying the existence of any such stored documents. Finally, in December of 1998, counsel for Wyeth announced that there "may" be some tapes in storage with documents from the relevant time period. It was several more months before the tapes were identified with respect to what systems had been used and the time frame they covered. By this time, plaintiffs had already conducted a large number of depositions which, conceivably, may have to be repeated. Moreover, plaintiffs' counsel has devoted a great deal of time and energy to the issue of electronic mail production which would have been unnecessary if the tapes had been produced in a timely fashion. Accordingly, the court orders Wyeth to bear the costs and fees associated with this discovery issue, including the Rule 30(b)(6) deposition of Daniel Cote, the deposition of Maria Woodruff, and the costs and fees associated with pursuing this motion. If the parties are unable to agree on those costs and fees, a motion and opposition may be filed.]

GTFM v. Wal-Mart Stores (2000), 2000 WL 335558 [Def had denied its ability to extract data from computer records; a year later, plt depo of a VP in the MIS department revealed the capability to extract the data but the delay prevented discovery of data previously available; the court ordered on-site inspection by plt expert assisted by def expert and at the expense of def.]

Alexander v. Federal Bureau of Investigation (D.C.1998), 188 F.R.D. 111 [discovery to determine adequacy of search when plt. questioned White House history of compliance not permitted when the opponent had provided uncontroverted declaration showing adequate search]

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EXPEDITED  DISCOVERY

EX PARTE ORDERS: preservation order; seizure or copy and preservation

Benefits of Order.  Although an order may not be necessary to create a duty of preservation, it clearly puts a party on notice of its duty and if the motion or the order is doen with specificity a party can not feign ignorance of the need to preserve particular items even if the order is denied. If the order is granted it provides a stronger basis both legally and psychologically to impose severe sanctions. See QZO, Inc. v. Mayer below.

See CRC Rule 379 re ex parte motions, notice

Alternative of motion on shortened time

Del Campo v. Kennedy (N.D.CA. 2006), 2006 WL 2586633, 2006 U.S. Dist. LEXIS 66728 The court granted Plaintiff's motion "to prevent the destruction of [recordings of telephone calls] and for an order requiring the parties to meet and confer to develop a document preservation plan."  First, the court issues an interim preservation order (which followed an earlier preservation order pending this hearing). "An interim order is appropriate. Accordingly, until the parties agree upon, or the court imposes, a document preservation plan, the parties are prohibited from destroying discoverable material including, but not limited to: all records of communications with, and collection activity, concerning putative class members, all records of agreements with, and transactions between co-defendants, all records of communications with, and transactions between, defendants and California district attorneys, and all records of communications with, and transactions between, defendants and merchants who referred returned.  Second the court suggested that if the meet and confer process did not produce an agreement, the court would rule on unresolved issues. If the parties fail to agree upon a plan, the parties can submit a joint statement of the issues in dispute and a brief argument in support of their positions.

Dodge Warren & Peters Ins. Serv. v. Riley (2003), 105 Cal.App.4th 1414 [ex parte application treated as motion for preliminary injunction after continuance for competing motion for protective order. See below]

Cf. In re Merrill Lynch & Co., Inc. Research Reports Securities Litigation 2004 WL 305601 (S.D.N.Y.) Noticed motion pursuant to. the Securities Exchange Act of 1934 for an Order lifting the automatic stay of discovery because of a need to preserve and restore emails already deleted denied. The court noted there was no imminent risk because appropriate sanctions could be imposed if evidence were destroyed and because "Defendants avow that they are aware of their obligations and have taken and are continuing to take all necessary steps to preserve all potentially relevant electronic evidence."

Pueblo of Laguna v. United States  60 Fed.Cl. 133, 138 (2004)  [require showing for order]

CAPRICORN POWER COMPANY, INC. v. SIEMENS WESTINGHOUSE POWER CORPORATION 220 F.R.D. 429(W.D. Pa.2004) The court denied motions by both parties for preservation orders after a mistrial noting there must be some demonstrated need and factual basis. A preservation order in aid of the discovery process is an equitable remedy that differs from an injunction. Noting the lack of authority on the issue despite a common practice of issuing preservation orders, the court rejected the four part test for issuance of injunctions and formulated a three factor balancing test for a preservation order:

“While remaining consistent with the Federal Rules of Civil Procedure, but still addressing the need to perform the judicial duty to oversee and decide discovery disputes, this Court believes that a balancing test which considers the following three factors should be used when deciding a motion to preserve documents, things and land: 1) the level of concern the court has for the continuing existence and maintenance of the integrity of the evidence in question in the absence of an order directing preservation of the evidence; 2) any irreparable harm likely to result to the party seeking the preservation of evidence absent an order directing preservation; and 3) the capability of an individual, entity, or party to maintain the evidence sought to be preserved, not only as to the evidence's original form, condition or contents, but also the physical, spatial and financial burdens created by ordering evidence preservation.

The court suggested that normally the first two factors should be present: there should be a real threat supported by facts beyond the normal fear or anxiety and the anticipated harm should be substantial: “In the presence of a significant threat, if an order of court can prevent the loss, deterioration or destruction of evidence, while also considering all other relevant circumstances, then such an order may be an appropriate remedy.” The Court reiterated, “Motions for the preservation of evidence should be restricted to those circumstances which raise significant concern that discovery lawfully sought by a party will be lost indefinitely without immediate court action in the form of an order of preservation.” However, a high degree of risk or of the importance of the evidence might suffice. The court also suggested that the burden of preservation, including costs, could be shifted.

Williams v. Massachusetts Mut.Life Ins.Co. 226 F.R.D. 144 (D.Mass.,2005). [Capricon Power approved. "The court, however, will order Defendants to preserve all documents, hard drives and e-mail boxes which were searched by their forensic expert in response to Plaintiff's motion. ... Such an order, in the court's estimation, is not unduly burdensome and is necessary, at a minimum, to preserve Plaintiff's appellate rights."

Etzion v. Etzion 2005 NY Slip Op 25115; 2005 N.Y. Misc. LEXIS 519 (Nassau County Supreme Court, 2005) In order to trace funds in a divorce involving allegations of conversion, fraudulent transfers of property, and international financial transfers for concealment, Plaintiff sought information that may be contained on all personal and business computers.  Of interest was Plaintiff's request, which was denied, for an order equivalent to a search warrant for home and business premises to enable her to seize computers including the use of the sheriff to break down doors and remove any obstacles with civil immunity for damages.

QZO, Inc. v. Moyer (S.C.Ct.App.  3/15/04)  2004 WL 502288  TRO issued same day complaint filed.  Judgment entered for wilful violation of TRO directing defendant to immediately turn over computer that belonged to plaintiff and  believed to contain evidence of wrongful acts by defendant starting competing business. The  trial court  “determined that the information in the  computer was in danger of being altered or destroyed before a hearing on the matter could be accomplished, and that irreparable harm would result if the TRO were not issued.” The trial court  granted the TRO  ordering defendant “to immediately surrender the computer upon receipt of the order.” Defendant waited seven days after service before complying and the  “expert’s examination revealed that the hard drive was reformatted a day before the computer had been turned over, effectively erasing any information the computer may have contained”.   The trial court found defendant “willfully destroyed evidence relevant to Palmetto’s case.  Thereafter, while recognizing the severity of the sanction, the trial court struck Appellant’s pleadings and entered a judgment of liability in favor of Palmetto. The Court of Appeals finding no abuse of discretion

Linnen v. A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 [plaintiff obtained preservation order on day complaint was filed; although order was set aside shortly thereafter, its short existence formed basis for ultimate spoliation sanctions]

R.S. Creative Inc. v. Creative Cotton Ltd. (1999), 75 Cal.App.4th 486 [although not an issue in the case, parties recognized importance of such protection and stipulated to the non-use of the computer until examined by opponent's expert; violation of the stipulation was one factor of many that supported spoliation sanctions of dismissal]

First Technology Safety Systems, Inc. v. Depinet, 11 F.3d 641 (6th Cir. 1993). [ex parte seizure of hard drive]

Adobe Systems v. South Sun Products (S.D.Ca.1999), 187 F.R.D. 636 [ Major software companies denied ex parte search & seizure order sought w/o notice against wholesale jeweler with 40 employees and 20-30 PCs accused of pirating software and using it on more than one computer in violation of licensing agreement. First Tech followed. Plt failed to show more than possible destruction of evidence and irreparable injury. Factual showing of likelihood of destruction of evid.(e.g. by history)and disregard of court orders for preservation required]; see also Adobe Systems v. Ajine (W.D. Va) 2001 WL 252916 re similar denial of ex parte relief for lack of showing to justify it such as prior destruction of evidence or wilful violation of court order.

Religious Technology Center v. F.A.C.T.Net, Inc., 901 F.Supp 1519 and 901 F. Supp. 1528 (D. Colo. 1995).[Ex parte seizure of computer equipment and software from defendant's premises.]

Twentieth Century Fox Film Corp. v. Mow Trading 749 F. Supp. 473

Kleiner v. Burns (2000 D.Kan), 2000 WL 1909470 [parties stipulated to preservation order and court included it in discovery order to preserve relevant evidence including "data compilations, computerized data and other electronically-recorded information". Plaintiff was seeking voice mails, emails, web sites and web pages in compliance with former FR26]

Superior Consultant Co. v. Bailey, 2000 WL 1279161 (E.D. Mich. 8/22/00) [General TRO & prelim inj issued re not "destroy, alter, modify nor conceal any relevant data, including data stored on computer media", requiring creation and production of "backup file" of laptop and "any hard-drive" to which def had access, and requiring production of "redacted copy" of "hard drive backup files"; case does not discuss issue of e-data preservation and producton]

Lack of California authority

Show why evidence sought is likely to be destroyed, modified or concealed if notice of the lawsuit is given
Consider appointment of independent computer expert so party will not have improper access
Set forth specific search criteria satisfying the 4th Amendment that items to be seized be identified with particularity.
Make a "backup" copy of the computers and floppy diskettes at premises so there is no unreasonable disruption of business operations.
Provide for discovery of specific files after notice and an opportunity to be heard

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PROTECTIVE / PRESERVATION ORDER  order on noticed motion

Protective or preservation orders may be sought at any time but, due to the dynamic nature of electronic data,  such orders should be sought promptly before data is destroyed in the normal course of operations or deleted  pursuant to normal document retention and destruction policies of a party. Such orders may not create a duty to preserve that does not already exist for spoliation purposes.  However, a request clearly places the parties and the court on notice of potential evidence to be preserved even if the requested order is denied.  For that reason, making and losing a motion for a preservation order  may be as effective as obtaining it if the ultimate issue of spoliation arises.  A judge who denied a preservation order will likely remember that decision when someone moves for sanctions because their fears came true.

SHOWING FOR ISSUANCE

Specificity and precision are important in such orders and requests for orders.  If too broad they are meaningless and difficult to enforce and literal compliance could shut down the operations of a party. If too narrow they do not provide adequate protection. 

QZO, Inc. v. Moyer (S.C.Ct.App.  3.15/04)  2004 WL 502288   Judgment entered for wilful violation of TRO directing defendant to immediately turn over computer that belonged to plaintiff and  believed to contain evidence of wrongful acts by defendant starting competing business. The  trial court  “determined that the information in the  computer was in danger of being altered or destroyed before a hearing on the matter could be accomplished, and that irreparable harm would result if the TRO were not issued.” The trial court  granted the TRO  ordering defendant “to immediately surrender the computer upon receipt of the order.” Defendant waited seven days after service before complying and the  “expert’s examination revealed that the hard drive was reformatted a day before the computer had been turned over, effectively erasing any information the computer may have contained”.   The trial court found defendant “willfully destroyed evidence relevant to Palmetto’s case.  Thereafter, while recognizing the severity of the sanction, the trial court struck Appellant’s pleadings and entered a judgment of liability in favor of Palmetto. The Court of Appeals finding no abuse of discretion

Dodge Warren & Peters Ins. Serv. v. Riley (2003), 105 Cal.App.4th 1414
Issuance of preliminary injunction to preserve electronic data affirmed; no abuse of discretion; departing employees copied documents onto disc for later use in new business; Plaintiff had already served formal request for same docs; order "prohibited Defendants from destroying, deleting or secreting from discovery any of their electronic storage media and required them "to allow a court-appointed expert to copy [docs], including computer hard drives and discs, to recover lost or deleted files and to perform automated searches of that evidence under guidelines agreed to by the parties or established by the court."; in addition the order provided:

"media would be copied in Defendants' presence and after working hours so as to not interrupt their ability to conduct business.
No damage to or loss of information would result from the copying.
The copied material would be unavailable to anyone except upon agreement of the parties or order of the court. Thus, concerns over privacy and privilege were minimized to the point of nonexistence.
Further, the reasonable cost to Defendants to review the copied files for irrelevant and privileged documents was to be borne by Dodge, subject to reallocation by the trial court."

NOTE: At least two California appellate decisions have held that an injunction is required to preserve evidence and that a protective order may not be the appropriate means of preserving evidence.
Under Dodge Warren and Northpoint Homeowners (1979), 95 CA3d 241 "protective orders" issued pursuant to the discovery provision could be found to be invalid unless they comply with the injunction sections. This approach by two courts raises significant issues that have yet to be addressed: mandatory or prohibitory, stay on appeal, proof and bonding requirements and the timing limitations of TRO's. Are discovery sanctions and spoliation remedies ineffective thus justifying injunctions and contempt but not evidentiary, issue or terminating sanctions or other spoliation remedies? are protective orders issued without bonds or compliance with the injunction procedures invalid and unenforceable or only enforceable by contempt proceedings and not discovery or spoliation sanctions?

CI Host Inc. et al, In re (Tex.2002) 92 S.W.3d 514 [Class action by customers against web hosting company; Not issue but preservation order issued orderin refraining "from deleting or disposing of critical information pertaining to its web-hosting activities, including 'emails, billing data and other internal memoradum."; it also ordered preservation of backup date on specific date. Request for production followed and defendant failed to meet its burden of proof to show entire backup tape was protected even though part might be. Issues could be addressed in subsequent proceedings as to specific problems. ]

Antioch Co. v. Scrapbook Borders Inc. (D.Minn. 2002), 2002 WL 31387731 [motion for general preservation order re all relevant information not opposed]

Prudential Ins. Co. of Am. Sales Practices Lit., 169 F.R.D.598 (N.J.D.1997) [Preservation order obtained in class action 6 months into litigation. Prudential was sanctioned $1 million + attorneys fees for not acting quickly and efficiently to prevent the destruction of documents]

Procter & Gamble v. Haugen, 179 F.R.D. 622, (D. Utah April 17, 1998), [The court generally denied sanctions because it couldn't infer bad faith from failure to preserve email but sanctioned Procter & Gamble $10,000 for failing to preserve e-mail messages of 5 key persons identified by it. In denying greater sanctions the court observed "...a court order would have delineated the scope of P&G's duties, provided clear evidence that P&G was on notice of the relevance of the e-mail communications, and furnished a standard by which this court could judge the adequacy of P&G's production efforts."]

United States v. Koch Industries Inc.(N.D. Okl.1998), 197 F.R.D. 463 [broad and general preservation orders issued]

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PRESERVATION ORDER TERMS: What is reasonable restraint ?

See above re protective orders
See below re spoliation resulting from inadequate document retention policies
See below re spoliation for failure to comply with order

General orders may be difficult to enforce or inevitably lead to inadvertent violations

Procter & Gamble v. Haugen (10th Cir. 2005), 427 F.3d 727.  District Court sanctions order for failing to preserve and produce electronic data was reversed when the trial court had failed to address and clarifiy what preservation efforts were required and what had to be preserved or produced.  "Given these circumstances, it is simply unclear what the district court considered P&G's duties to have been regarding preservation and production of the IRI-related data. In turn, it is impossible to conclude that P&G acted with the requisite culpability to justify the sanction of dismissal."

Prudential Ins. Co. of Am. Sales Practices Lit., 169 F.R.D.598, 600 (N.J.D.1997) [order provided among other things a requirement to "preserve all documents and other records containing information potentially relevant to the subject matter of this litigation." Violation of this resulted in monetary sanctions against Prudential for $1million payable to the court plus attorneys fees.]

Antioch Co. v. Scrapbook Borders Inc. (D.Minn. 2002), 2002 WL 31387731 [motion for general preservation order re all relevant information not opposed]

Cost and disruption of business issues

System may provide for automatic deletion of documents and cost of revising software may be prohibitively expensive
System operation alters some data and absolute preservation may require shut down of business
Simon Property Group v. mySimon (S.D.Ind.2000), 194 F.R.D.639, 642 [Discovery motion. Court was concerned but hampered by lack of information provided by the parties on the motion]

Refrain from any activity that would alter or damage data on any computer systems [vague and onerous ?]

Linnen v. A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 [ex parte order entered on day complaint filed until further order of court: "take all necessary step to assure employees [etc.] refrain from ...destroying...deleting...documents including but not limited to...data compilations, e-mail...back-up....]

CI Host Inc. et al, In re (Tex.2002) 92 S.W.3d 514 [Class action by customers against web hosting company; Not issue but preservation order issued orderin refraining "from deleting or disposing of critical information pertaining to its web-hosting activities, including 'emails, billing data and other internal memoradum."; it also ordered preservation of backup date on specific date. Request for production followed and defendant failed to meet its burden of proof to show entire backup tape was protected even though part might be. Issues could be addressed in subsequent proceedings as to specific problems. ]

Zhou v. Pittsburgh State University 2003 WL 1905988 (D.Kan.2003) ["It is further ordered that the parties shall preserve evidence that they know, or should know, is relevant to the ongoing litigation, including preservation of all data compilations, computerized data and other electronically-recorded information as specifically defined in this Order"]

Retain storage devices being replaced due to failure or system upgrade
IMAGE COPIES:  Ghosting disk or hard drive

See Playboy Enterprises v. Welles (S.D.Cal.1990), 60 F.Supp.2d 1050, 1054 re use of neutral
Simon Property Group v. mySimon (S.D.Ind.2000), 194 F.R.D.639
Antioch Co. v. Scrapbook Borders, Inc. 210 F.R.D. 645  (D.Minn.,2002)

Use of proper software
Exam by neutral with parties experts observing
Virus infection issue
Destruction, modification & preservation of data
Business disruption to be avoided

Preserve backup tapes

Refrain from the practice of "recycling" tapes used for backup purposes so that old data is not overwritten.
Prohibit destruction of backups in normal course

Deleting, de-fragmenting, compressing data or disposing of any electronic media.
Overwriting current data that needs to be preserved

by saving new data to media containing data
by installing new software or files on such media

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Weiller v. New York Life Ins. Co., 6 Misc.3d 1038, 2004 WL 3245345 (N.Y. Sup. Ct.2005) ["Defendants attest that preservation of computer hard drives under the preservation order issued in the MDL resulted in a cost to defendants of more than$1,000,000.00 (Hoehle Aff. ¶ 15). The court is not insensitive to the cost entailed in electronic discovery, and would, at the appropriate juncture, entertain an application by defendants to obligate plaintiff, the requesting party, to absorb all or a part of the cost of the e-discovery it seeks, or will seek, herein"]