Legend says in 2005, litigation began over cell phone towers and “monopoles.” Discovery was extensive. Summary judgment motions were lost and won.
Time had past. And then, what was lost was then found.
When You Find the Ark of the e-Discovery Covenant
A custodian’s computer was found in September 2008 that had been in storage. The custodian was terminated in 2002. The computer had not been searched in the lawsuit and nothing from it produced in discovery. Crown Castle USA, Inc. v. Fred A. Nudd Corp., 2010 U.S. Dist. LEXIS 32982, at *14 (W.D.N.Y. Mar. 31, 2010).
Email messages from the lost computer were produced to the opposing party in December 2008. Crown at *14.
The messages included an exchange between the lost custodian and a key player who was responsible for the “monopoles” in the lawsuit. Crown at *14.
The producing party had 15 custodians re-searched their records for other responsive documents after finding the lost hard drive.
Much to their horror, they found more responsive electronically stored information.
An additional 1,442 email messages were produced from one of the key players in January 2009, totally nearly half of the late production. Crown at *14. Twenty-two more emails were produced in August 2009. Crown at *15. Engineering reports were also found that were prepared for a municipality. Id.
Adding to the nightmare, the late-produced emails showed the producing party knew of a product defect, which disproved their own victorious arguments from their motion for reconsideration to reinstate certain claims. Crown at *17.
No one wants to be in this position.
The Temple of Discovery Doom
The producing party’s discovery failures took the Court on an analytical adventure spanning preservation, litigation holds and the collection of electronically stored information.
The producing party’s emails with in-house counsel showed they contemplated litigation in August 2004. Crown at *18-19. Email messages were labeled “Attorney-Client” and they hired litigation counsel by November 2004. Crown at *19.
The producing party’s document retention/destruction policy called for email messages to be deleted within 90 days of an employee’s termination. Crown at *19. These email messages were not stored on back-up tapes. Id.
Conversely, electronic documents were deleted within two weeks of an employee’s termination and stored on back-up tapes for one year. Crown at *19.
As the producing party admitted in correspondence:
[R]ecords generated in the normal course of business from 2001 until this litigation were retained or not retained on an individual employee basis, and Crown expects that some records generated during that time frame were not retained by those individual employees. Any documents that were deleted by the employee are not forensically recoverable.
Crown at *19-20.
The Danger of Custodian Collection of ESI for Production
The producing party’s protocol for responding to discovery can be summarized as follows:
1) Discovery requests provided to in-house counsel
2) In-house counsel asked specific employees to search for emails regarding the monopoles and collect the responsive documents.
3) The in-house legal team reviewed the employee collected material and provided the discovery to trial counsel.
Crown at *20-21.
This might sound good on paper until over a thousand responsive emails are found on computers you had access to for years, in addition to email messages found on a lost hard drive.
This sounds like a very bad plan when a custodian testifies that they were give no search instructions by their attorneys, so their “search” for responsive email with just one word that produce no results. Crown at *23.
This plan sounds extremely damaging when a custodian testifies that it was their practice to delete emails each week and they were never instructed to stop deleting email. Crown at *24.
I Have a Bad Feeling About This: Failure to Enact a Litigation Hold
There was no evidence the producing party enacted a litigation hold. Crown at *20.
One supervisor’s electronically stored information was destroyed after he left the producing party, which was 10 months after the duty to preserve was triggered and 4 months after the filing of the lawsuit. Crown at *35-36.
The Court described the “wholesale destruction” of ESI as “inexcusable.” Crown at *36.
The loss of the supervisor’s electronically stored information completely denied the requesting party any opportunity to conduct any discovery on the hundreds of emails he admitted to sending during his deposition. Crown at *36.
The Director of Engineering for the producing party was also never directed to search his records for responsive ESI. Crown at *36. The Court described the failure to preserve the Director of Engineering’s ESI as “inexplicable.” Crown at *37.
The Court stated the “reasonable inference” from the facts was the producing party “failed to take adequate measures to preserve electronic documents.” Crown at *37.
The Court further stated that a supervisor’s ESI being destroyed four months after the filing of the lawsuit as “wholly unacceptable.” Crown at *37.
The Court held the producing party acted with gross negligence with the failure to enact a litigation hold. Crown at *37. The Court could assume that the lost ESI was also relevant, because of the gross negligence and other produced emails showing relevancy. Crown at *40.
However, the Court could not find the producing party acted in bad faith by intentionally destroying data. Crown at *37.
Sanctions: Keep Your Eyes Closed!
The producing party, in-house legal and trial counsel rightly feared violently melting in Court.
However, they survived what could have been cataclysmic.
The Court could not find any evidence that the requesting party had been prejudiced by the destruction of the supervisor’s electronically stored information. Crown at *48.
There were nearly 500 emails from the supervisor that had been produced from other employees. Crown at *48. Moreover, there was no evidence that the lost email messages would have been favorable to the requesting party’s defense. Crown at *48.
The Court left open the possibility of a sanction sequel: The producing party had to pay the cost for re-deposing the supervisor. If the disposition testimony showed the likelihood that lost email was favorable to the requesting party’s defenses, then the requesting party could renew their request for an adverse inference instruction. Crown at *49.
Bow Tie Thoughts:
We Are Simply Passing Through e-Discovery. This, This is e-Discovery…
This case highlights what can go totally wrong with custodians performing self-collection, attorneys not providing sufficient guidance and the total gross negligence in failing to issue a litigation hold. Given that the facts of the lawsuit began in 2004, many of these errors are understandable for that time. Attorneys and clients in 2010 should not make the same mistakes in issuing litigation holds and preserving electronically stored information.
Self-collection of electronically stored information is playing Russian roulette with your case. Trusting that custodians will thoroughly collect all relevant ESI for review runs the risk of failed preservation, spoliation and sanctions. The end result in this case was custodian who used one keyword to search email that generated zero results.
Is a custodian searching Outlook for email and determining relevance cheap? Yes, it is. Is defending a motion for spoliation and adverse inference sanctions cheap? No. It also can be devastating if you lose. Even if you manage to dodge sanctions, being branded with “gross negligence” cannot help your case.
There are defensible cost-effective tools on the market to control collection costs. One is from PinPoint Labs, where a collection expert can write a script that is place on a thumb drive that will collect data off a computer. The device is given to the custodian, plugged into the USB port and allowed to run. Once the collection is complete, the thumb drive is placed in an evidence bag and sealed. A custodian affidavit is then completed and everything returned to the expert for processing.
The preservation and collection of data cannot be done on the “cheap” with custodians devising their own search terms on an ad hoc basis without the involvement of counsel. The collection of electronically stored information truly needs to have the involvement of the attorneys interviewing custodians and working with trusted consultants to select the most appropriate search terms. Developing this sort of workflow can show a reasonable, repeatable and defensible process that can avoid cases such where data is lost due to botched preservation and collection.