Parties who reasonably foresee litigation must preserve ESI that is relevant to the possible lawsuit. Identifying the individuals, subject matter, date range, are the first steps in determining the scope of the duty to preserve. In an EEOC case over age discrimination, a missing letter from an EEOC investigator and the lack of asking questions resulted in an improperly sized scope of preservation.
The issue before the Court was when the Defendant learned that the EEOC investigation was national in scope, opposed to one restaurant in Coral Gables. The issue of when did the Defendant know about the expanded scope would determine the type of sanctions that were appropriate. At the center of the dispute was whether the Defendants ever received an “expansion letter” dated August 31, 2011 that put them on notice the scope expanded to cover the country. United States EEOC v. GMRI, Inc., 2017 U.S. Dist. LEXIS 181011, at *8-9 (S.D. Fla. Nov. 1, 2017).
The Court found that the Defendant had never received the expansion letter; however, the Defendants knew or should have known that they had the duty to preserve records for 11 restaurants. The EEOC also sent a letter on September 1, 2011 that requested information from other restaurants “due to an expansion of the case.” GMRI, Inc., *9.
The initial litigation hold was issued to two individuals at the first restaurant in December 2010. The Defendant did not issue litigation holds for the other locations until three years and eight months after the “expansion letter.” GMRI, Inc., *13-14. The email accounts subject to the litigation hold were the managing partner and restaurant email addresses. GMRI, Inc., *21. The emails sent from February 2010 to February 2014 were saved for 90 days on the Defendant’s NearPoint Mimosa archiving system and then automatically deleted. Id. The only emails preserved were those subject to the litigation hold. Beginning in February 2014, the Defendant switched to a ProofPoint archiving system that featured an automatic three-year preservation for all emails. Id. A second litigation hold was issued in May 2015 for all 35 restaurants owned by the Defendant. Id.
The Defendants collected 2,300 gigabytes of ESI that totaled more than 5,500,000 unique records. After negotiations between the parties, the Defendants applied more than 1,500 broad search terms. The search hits were approximately 620,000 records for review and over 31,000 ESI records were ultimately produced at the cost of $700,000. GMRI, Inc., *28-29; 42-34, emphasis added.
Sanctions Sought by EEOC
The Plaintiffs sought an adverse inference instruction that any lost email messages would have included a “preference for younger applicants” and to prohibit the Defendant from introducing evidence about the content of lost emails. GMRI, Inc., *71-72. Such sanctions require evidence that the Defendant lost the ESI with the intent to deprive the Plaintiffs of the ESI under Rule 37(e)(2).
The Advisory Committee Notes to Rule 37(e) explain that negligence is not a basis for finding the intent to deprive, because a party could negligently lose information that would have been helpful to both parties. As such, finding the intent to deprive from negligent content could tip the balance of a trial in a way that the lost ESI never would have. GMRI, Inc., *71-72, citing ., Living Color Enterprises, Inc. v. New Era Aquaculture, Ltd., 2016 U.S. Dist. LEXIS 39113, at *6 n.6 (S.D. Fla. Mar. 22, 2016), emphasis added.
The Court’s Findings
The Court held that the Defendant knew by September 2011 that the duty to preserve included 11 restaurants. Furthermore, the Court stated the Defendants lack of follow-up to the September 1, 2011 letter about the “expansion” was unacceptable, because the attorneys should have asked the EEOC how the case was expanding. GMRI, Inc., *80-81. Despite the duty to preserve covering the 11 restaurants, the Plaintiffs were able to demonstrate that ESI had not been produced for three of the locations. GMRI, Inc., *81.
The Court rejected the charge the Defendants knew that the EEOC investigation was national in scope, as the communications with the EEOC covered 11 restaurants. As such, the duty to preserve applied to only those 11 locations. GMRI, Inc., *82. Moreover, the EEOC’s expert witness was still able to reach valid conclusions based on the available information. Id. As such, the lost ESI was not critical to the Plaintiff’s case, because there was other evidence available to the Plaintiff’s expert to make their case. GMRI, Inc., *85-86.
The parties could argue to the jury competing facts and theories about the meaning of the lost email, including whether it was relevant or irrelevant to the case. GMRI, Inc., *88-89. The Court would allow the jury to decide whether the Defendant’s ESI was lost with the intent to deprive to reach an adverse inference instruction. Id.
Bow Tie Thoughts
Determining the scope of the duty to preserve is a highly fact-specific exercise. This case included testimony from the Defendant’s in-house counsel on when they received letters from the EEOC and actions in executing a litigation hold. Furthermore, the eDiscovery consultant also provided testimony on how ESI was ultimately produced after collection. These are situations no party wants to be in. However, while whether the ESI was lost with the intent to deprive was ultimately left up to the jury, there could be competency issues for attorneys who fail to take reasonable steps to execute a litigation hold.
Once the duty to preserve has been triggered, relevant ESI has to be preserved. The first step in preservation is identifying the relevant ESI for collection. Attorneys should interview custodians and work with their eDiscovery consultant to identify the data sources for collection. The goal is to collect what is relevant to the case, without over or under collecting data. This can include identifying the individuals involved in the case, third parties who exchanged emails with the custodians, the date range covering the events of the lawsuit, and specific subject matter that can be used as keywords for initial searches.
I am currently working with Onna, which connects to most commonly used enterprise data sources allowing all employee accounts to be available for preservation when enacting a litigation hold. In cases like the one above, Onna can preserve ESI on multiple cloud-based accounts across an enterprise using API-based collection. If a data source is collected through a user’s account, then the collection process will involve going through an authentication process where the source (e.g. Box) states what Onna is being given permissions to access. Onna then breaks the source down into folders, channels or smaller units from the source to avoid overcollection. The entire account can be collected if necessary. An audit log can then be exported for a chain of custody report to show what data was collected.
Preservation is the blending of legal reasoning, knowledge of the facts, and collection technology, to ensure relevant information that is proportional to the needs of the case is defensibly collected. To learn more on how Onna can help with preservation, please visit http://onna.com/ediscovery