[Webcast Transcript] On the Case? eDiscovery Case Law Update for the First Half of 2020
Editor’s Note: On August 19, 2020, HaystackID shared an industry case law update including notable and important decisions related to eDiscovery best practices and data privacy concerns. While the full recorded presentation is available for on-demand viewing via the HaystackID website, provided below is a transcript of the presentation as well as a PDF version of the accompanying slides for your review and use.
On the Case? eDiscovery Case Law Update for the First Half of 2020
Needless to say, 2020 has been a very unusual year. But, despite court closings, there are still several notable and important case law decisions related to eDiscovery best practices and data privacy concerns. What do you need to know about the cases to prepare for the second half of 2020?
In this presentation led by eDiscovery Today’s Doug Austin, industry eDiscovery authorities will cover key case law developments during the first half of 2020 to identify important rulings that may impact how you conduct discovery going forward.
Webcast Highlights
+ Can simply viewing the lock screen on a criminal defendant’s mobile device violate the Fourth Amendment?
+ How can GDPR affect the ability to put pictures of loved ones on social media?
+ How should the use of ephemeral messaging apps be managed during litigation?
+ Does the Government have 37 years to crack an iPhone to obtain evidence from it?
+ Can a party be forced to use Technology-Assisted Review?
+ What should requesting parties consider when requesting native form of production?
+ Does GDPR protect a European citizen from having to respond to discovery requests in the US?
+ Can a court still issue significant sanctions for spoliation of ESI without intent to deprive?
Presenting Experts
+ Doug Austin – Editor of eDiscovery Today: Doug is an established eDiscovery thought leader with over 30 years of experience providing eDiscovery best practices, legal technology consulting, and technical project management services to numerous commercial and government clients.
+ Ashish Prasad – Vice President and General Counsel for HaystackID: As VP and GC for HaystackID, Ashish is regarded as among the leading experts on discovery in the US. He has served as Litigation Partner, Founder and Chair of the Mayer Brown LLP Electronic Discovery and Records Management Practice, Founder and CEO of Discovery Services LLC, and VP and GC of eTERA Consulting.
+ Vazantha Meyers, Esq. – Vice President of Discovery Services for HaystackID: As Vice President of Managed Review for HaystackID, Vazantha has extensive experience in advising and helping customers achieve their legal document review objectives.
Presentation Transcript
Introduction
Hello, and I hope you’re having a great week. My name is Rob Robinson, and on behalf of the entire team at HaystackID, I’d like to thank you for attending today’s webcast titled On the Case? eDiscovery Case Law Update for the First Half of 2020. Today’s webcast is part of HaystackID’s monthly series of educational presentations conducted on the BrightTALK network and designed to ensure listeners are proactively prepared to achieve their computer forensics, eDiscovery, and legal review objectives during investigations and litigation.
Our expert presenters today for today’s webcast include three of the industry’s foremost subject matter experts and authorities on eDiscovery topics, ranging from technologies and services to case law. What you see on the agenda slide right now are some of the things that will be covered by these experts, and now, I’d like to go ahead and introduce these individuals if I may.
Today’s moderator for the webcast is Doug Austin of the industry acknowledged eDiscovery blog, eDiscovery Today. As many of you well know, Doug is an established consultant, author, and eDiscovery thought leader with over 30 years of experience providing eDiscovery best practices, legal technology consulting, and technical project management services to numerous commercial and government clients, and he presents regularly on a range of industry topics and is a regularly sought-after commentator on current eDiscovery case law.
Our second presenter is Ashish Prasad. Ashish is the Vice President and the General Counsel for HaystackID. He’s widely regarded as one of the leading experts on discovery in the United States and he served in leading industry roles that include litigation partner, founder, and chair of the Mayer Brown Electronic Discovery and Records Management practice, Vice President and General Counsel of eTERA Consulting, founder and CEO of Discovery Services, and has also served as an adjunct professor of law at Northwestern University Law School. In addition to that, has extensive experience in managing all aspects of discovery and litigation and investigations. Ashish has defended discovery compliance procedures before numerous courts and regulators.
Our final presenter is Vazantha Meyers. Vazantha serves as Vice President of Discovery Services for HaystackID, and she has extensive experience in advising and helping customers achieve their legal document and review objectives and is recognized as an expert in all aspects of traditional and technology-assisted review. Vazantha graduated from Purdue University and obtained her JD from Valparaiso University School of Law.
Today’s presentation will be recorded for future viewing, and a copy of the presentation materials will be available for all attendees, and you can access these materials directly beneath the presentation viewing window on your screen now by selecting the Attachments tab on the far left of the toolbar, beneath the viewing window. Also, the recorded webcast will be available for viewing directly from the HaystackID website and from the BrightTALK network after completion of today’s presentation.
At this time, I’d like to turn the mic over to our expert presenters, led by our guest and today’s moderator, Doug Austin, for their comments and considerations on recent developments in eDiscovery case law. Doug and team, welcome.
Doug Austin
Thanks, Rob. Feels like old times to be doing this once again. So I get to start with the disclaimer. Just a reminder, of course, that any ideas expressed by us here today are our own, not those of HaystackID or eDiscovery Today, or our clients or partners. So with that said, and with Rob’s great introduction, let’s get into it.
All right, so we’ll start our case law discussion today with a case where law enforcement never technically entered the criminal defendant’s phone, yet it still had a fourth amendment beef over what they did do. In US v. Sam, No, there were two examinations of the defendant’s cell phone, one by a local police department and a second one by the FBI. With regard to the police examination, there was a dispute as to when and how the defendant’s cell phone was examined. The defendant claimed that the arresting officer activated his phone’s display screen during his arrest, which revealed the name “STREEZY”, while the police department claimed it was viewed at the department for inventory purposes, and to place it into airplane mode so the phone couldn’t be wiped remotely. However, there was no dispute regarding the FBI exam, which occurred on February 13 of this year and involved the FBI taking a picture of the lock screen with the name “STREEZY” on it. With regard to that examination, Washington District Judge John Coughenour granted the defendant’s motion to suppress cellphone contents, ruling that the FBI searched the phone within the meaning of the Fourth Amendment, and because the FBI conducted the search without a warrant, the search was unconstitutional. As for the police department search, ruling that the record is devoid of concrete evidence regarding the inventory search purportedly conducted by the Tulalip Police Department, Judge Coughenour ordered the parties to file a supplemental briefing addressing the circumstances surrounding those alleged examinations. He referenced both Riley v. California, which addresses privacy concerns associated with warrantless searches, and United States v. Robinson, which creates a categorical rule allowing officers to search physical objects found on an arrestee’s person in that analysis.
So Ashish, good morning, all the FBI did was turn on his phone and take a picture of the lock screen. Can that really be considered an unwarranted search under the Fourth Amendment?
Ashish Prasad
Doug, I think we have to say the answer to that question is yes because when the phone was unlocked, they did get information that was relevant, namely the name “STREEZY”. I think of this as having an analog in the civil world of the Rule 34 definition of a document. Of course, that includes any type of source that has content, and so since they got that content, I think it does put this in the category of an unwarranted search.
Doug Austin
OK, thanks, Ashish. Certainly, we’ve seen a lot of recent cases regarding Fourth Amendment rights and access to personal devices with varying results. So what recommendations do you have for our audience of how to handle this changing landscape?
Ashish Prasad
The first and most important thing I would say is that in the world of civil litigation, where most of the people in our audience are coming from, the Fourth Amendment case law has not been as important, and clearly, it’s important that we know the Fourth Amendment case law with respect to eDiscovery, but those precedents don’t generally come up all that often in our litigated issues and even in our best practices with respect to eDiscovery on the civil side. That being said, I think the single and most important best practice is to be following a very fine and documented chain of custody practices with respect to the collection of data sources. We like to see, on the civil side, the chain of custody practices and documentation be largely equivalent to what we see on the criminal side. That’s, I think, the best thing that can be done to protect the client from adverse consequences of this type.
Doug Austin
Yes, that makes sense. Certainly, the chain of custody was at issue here with regard to the police department’s alleged search. so that certainly is great advice. Thanks, Ashish.
So our next case goes across the pond to the Netherlands in a case which I covered a few weeks ago. Unfortunately, in this one, there was a falling out between a woman and her daughter, which escalated to the point that the daughter asked the woman to take down pictures of her kids, which were the woman’s grandkids, on Facebook and Pinterest several times. When the grandmother failed to do that, the daughter took her to court over privacy considerations under the General Data Protection Regulation, or GDPR. While the GDPR doesn’t apply to observing personal or household processing of data, the Dutch court ruled that exemption didn’t apply because posting photographs on social media made them available to a wider audience, stating, “With Facebook, it cannot be ruled out that placed photos may be distributed and may end up in the hands of third parties.” The court ordered the woman to remove the photos or pay a fine of €50 for every day that she failed to comply with the order, up to a maximum fine of €1,000 euro, and if she were to post more images of the children in the future, she’d be fined an extra €50 a day.
So, good morning, V. As I know that this was a Dutch ruling, do you think we could see similar rulings like this in the US as well?
Vazantha Meyers
So first, let me say I am a grandmother that posts pictures of her grandson, and I hope I never have a falling out with – audio -.
Doug Austin
Oh, thank goodness for that.
Vazantha Meyers
So, to answer your question, yes, I think that we’re going to get to a place where this could be a ruling. One, we have legislation currently enacted that protects the privacy of children and usually the parent rules in terms of making a decision on what information can be uploaded or protected or online. We also have changes in legislation now, like the California Privacy Act, where we’re paying more attention to personal information and who controls that information. We have issues now with phishing and fraud, and a lot of reasons why we want to protect personal information, and so I think the courts are recognizing the need to give people control over that information and for children the parents control, so that Dutch ruling, I don’t think is wrong, and I think it can happen in the US.
Doug Austin
OK, so with that in mind, and the possibility of that happening over here, what recommendations do you have for our audience on protecting their own personal data on social media that might be posted by others?
Vazantha Meyers
So I think this goes back to the same sort of information that our privacy experts give us in terms of protecting information, is that you have to control what you put out there, and who has access to it, and know where it is, and so I think that some of the legislation that’s coming up now gives people the ability to control where their information is, and we should take advantage of that, and we should also be good to our grandmothers.
Doug Austin
Yes, indeed. Yes, you’d hate to see a family situation get to that point, but certainly, one of the things we know, and I remember covering a case about this last year, is a case where a person was claiming a physical disability and friends posted pictures of him doing activities on social media, so that wound up being discoverable. So certainly, it’s more of a slippery slope than ever.
Vazantha Meyers
Yes, and awareness. Just like you said, people take pictures of us and they post them, we should be aware that happens, where our pictures are being posted, and I guess, act accordingly. One of the things that we are told by our privacy and security expert is control what you put out here in the world and it can’t be used against you. I know that doesn’t apply exactly to this situation, but awareness and control is probably your key defenses in terms of having your information out there.
Doug Austin
Yes, absolutely. That’s great advice. Thanks, V.
So, our next case, let’s just say this case was a comedy of errors, or maybe it was perhaps a tragedy of incidences [inaudible] spoliated ESI. In WeRide Corp. v. Huang, the defendants, who were former employees of the plaintiff’s company to set up a competing company, were alleged to have solicited its employees, and also allegedly downloaded significant amounts of data from the plaintiffs’ servers, and at least one company laptop. They admittedly destroyed email despite a court injunction, they failed to produce source code at the heart of the dispute, and they wiped several devices, including a MacBook that was returned to Apple after the plaintiffs sent a cease and desist letter. The defendant’s CEO also recommended that the defendants use the ephemeral messaging platform, DingTalk, after the complaint was filed, despite the fact that it automatically deletes messages after they’ve been sent and read. Needless to say, California District Judge Edward Davila granted the plaintiffs’ motion for sanctions through FRCP Rules 37(b) and 37(e), issuing terminating sanctions against defendants Wang, Huang, and AllRide, and ordering them to “pay WeRide’s reasonable fees and costs incurred in connection with (i) this motion; (ii) all discovery related to their spoliation of evidence; and (iii) the discovery motion practice before {Magistrate} Judge Cousins.”
So, Ashish, the defendants did a lot of wrong things, but the court clearly found they were in bad faith. Do you think they would have received the same sanctions if their only transgression would have been the use of the ephemeral messaging platform?
Ashish Prasad
I doubt that level of sanctions, which of course was terminating, would have been the same if it was just the use of the ephemeral messaging app as opposed to including the wiped computers and the spoliated source code, and the destroyed email, but I do feel that a sanction would have been warranted if it was just use the ephemeral messaging application. It’s important to remember that they begin, if you look at the case, using the ephemeral messaging application after the injunction had been issued, and I think that’s a really important fact.
Doug Austin
Yes, absolutely. As just a reminder to everybody who’s in the audience, all of the cases here, there are hyperlinks to each of the cases we’re talking about, so you can certainly go and check out the cases on your own.
So, Ashish, what advice do you have for our audience regarding the use of ephemeral messaging apps, when there’s a duty to preserve ESI?
Ashish Prasad
If ephemeral messaging apps are being used before a duty to preserve arises, it’s very important that the whole notice that goes out to employees, which advises them on the existence of the hold, include instructions to stop using the ephemeral messaging app, at least with respect to any communications related to the subject matter of the hold. I don’t generally see corporate IT departments supporting ephemeral messaging apps, although I’m not saying it’s never occurred. If it’s a situation where the corporate IT department is supporting the use of an ephemeral messaging app, then I think it’s going to be important for steps to be taken with that IT department to halt such support insofar as it would violate a hold. So for example, if there are people on a hold who are using that ephemeral messaging app, it might be deemed the most appropriate thing to halt IT support for that with respect to those particular people. I think the important point we want to make here is that if there’s a hold, it’s likely not going to be persuasive to a judge that an ephemeral messaging app was being used, and the app caused the destruction of relevant information pursuant to the app’s policies. There may be people who would think that. I think a court would most likely find that if a person was apprised of a hold, and then continued to use the app with knowledge that communications are occurring subject to the hold, but that the app would be discarding those communications, I think a court would likely find that that person was in violation of the hold even if the app was set up that way.
Doug Austin
Yes, absolutely, and it’s certainly important to remember that just about any messaging app can be ephemeral if it’s set up that way, even text apps. I know the text app for iPhones is by default set to keep things indefinitely, but certainly, people can change that. So, it is one of those things that you have to look to now when it comes to issuing a litigation hold [inaudible] deleted emails, you have to certainly look at those apps, certainly. So yes, thanks, Ashish.
We’ll move onto the next case, which is another fun case. Here’s a case where the phrase “not going anywhere for a while, have a Snickers bar” is kind of appropriate. In US v. Morgan, while the defendant was added to the case in 2019, a search warrant was issued over a year earlier against this company, which included his devices. Back then, the government started to try to crack the defendant’s iPhone passcode using a device called GrayKey, which uses brute force to try to access the iPhone by entering potential passcodes until it finds the correct passcode. A six-digit passcode results in a million potential passcode combinations, but the iPhone’s hardware only allows two or three passcode attempts each hour, so cracking the password is a painfully slow process, to the point that at the beginning of this year, the [device] hadn’t even got through 40,000 attempts over a year and a half after it started. At that rate, the government estimated that it could take as long as 37 years to successfully unlock the iPhone, so the defendant filed a Motion for Return of Property Under Federal Rule of Criminal Procedure 41(g). While agreeing that “anywhere close to 37 years is an unreasonable time to retain the iPhone”, New York District Judge Elizabeth Wolford denied the defendant’s motion, stating that “with a trial not scheduled to commence until next year…there is still plenty of time for the government to access the iPhone’s contents” and ruling that “the government’s evidentiary interest in the [defendant’s] iPhone outweighs Defendant’s interest in its return, at least at this stage of the proceedings.”
Ashish, so unless the government’s lucky, they’ll still be trying to open the iPhone this time next year, do you think there will be pressure on device manufacturers to provide a backdoor for criminal investigation, or are investigators going to continue to struggle obtaining evidence [into these very] secure devices?
Ashish Prasad
Well, that’s a big social and political issue, as everybody on the call knows, and it’s been well covered in the media. My impression is that the current situation we have now, which is that law enforcement doesn’t have those kinds of backdoors, at least insofar as we are aware, my impression is that that will likely continue given the strong policy arguments on either side of that question, without expressing an opinion on what’s right or wrong. So, I think just in terms of what’s likely to occur, the investigators will continue to be confronted with these types of burdens and trying to access data by unlocking an iPhone and things of that nature.
The one thing I do want to say is, though, that even if that changes, and the balance maybe tips more toward law enforcement’s requirements and less toward the privacy expectations of citizens, I think it’s very possible that on the civil side, which as we discussed earlier, is the focus of most of the people on this call, on the civil side, I think that balance may very well not be ticked. In other words, maybe a regime comes into effect where, for law enforcement purposes, you can crack an iPhone, but I would be a little surprised if that would come into effect for your typical civil litigation. I think a line might very well be drawn that criminal is one thing, civil is another, and so I think when it comes to planning and executing eDiscovery on the civil side, we have to expect that the current situation would likely endure in terms of inability to get those things cracked, so to speak.
Doug Austin
Fair. No, that makes sense. Also, when [you ask me this], I know HaystackID does internal investigations, I mean, I could see the same scenario playing out in an internal investigation with an organization attempting to get into a BYOD device in an employee that they’re investigating. So what recommendations would you have for our audience to address that scenario?
Ashish Prasad
So there aren’t a lot of good options out there to do what would be required in that situation, and I have not personally been involved in that kind of thing. So, I think that if it’s a BYOD situation, companies are oftentimes basically limited to what they can actually do technologically and legally. So I’ve not heard of a situation where a company has tried to crack an iPhone, or things of that nature. If it’s a lawsuit in a federal or state court, as opposed to an internal investigation, then I think we have a little bit more optionality there because then the party can move for a protective order from the court or can reach an agreement with respect to the other side as to what’s to be done, and on that issue, I think it’s important to point out that unlike in US v. Morgan, which is a criminal case, in a civil matter, we would have the proportionality principle, which, as everyone knows, talks about the need for burdens and benefits to be balanced in all discovery, and so in this type of situation, if it’s a civil case and the proportionality principle applies, we can use the proportionality principle to argue to a court, or secure agreement to from the other side, that what we would call herculean or excessive efforts are to be avoided.
Doug Austin
No, that’s a great point. Certainly, proportionality is much more at play these days since the 2015 federal rules, and these things have to be weighed in regard to balancing the proportionality versus the relevancy. So that’s a great point, Ashish.
So our next case is a class action, In re Mercedes-Benz Emissions Litigation, and in this case, the plaintiffs proposed that the defendants use technology-assisted review, asserting it yields significantly better results than either traditional human “eyes on” review, and/or the use of search terms. But they also hedged their bets, arguing that if their request was declined, the Court should enter its proposed Search Team Protocol. On the other hand, the defendants argued that there is no authority or imposing TAR on an objecting party, and also argued that this case presented a number of unique issues that would make developing an appropriate and effective seed set challenging, instead contending that they should be permitted to utilize their preferred custodian-and-search term approach.
Special Master Dennis Cavanaugh cited a couple of rulings by now-retired Judge Andrew Peck, who was the judge on the first case [approving] TAR. In the first case he cited, Rio Tinto, Judge Peck stated: “While the case law has developed to the point that it’s now black letter law that where producing party wants to utilize TAR for document review, courts will permit it, no court has ordered a party to engage in TAR over the objection or that party.” Judge Peck went a step further in Hyles v. New York City and stated: “Despite the fact that it is widely recognized that TAR is cheaper, more efficient and superior to keyword searching…”, he referenced it on [a principle six, stating], “…courts also recognize that responding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for producing their own electronically stored information.”
So Special Master Cavanaugh declined the order of the defendant to use TAR, instead ruled on specific disputes between the parties to approve a search term protocol.
So, V, we’ve yet to see a case where a party was ordered to use TAR, at least that I know of. Is there any circumstance you can think of where it’s appropriate to order a party to use TAR against their will?
Vazantha Meyers
You know, Doug, I’ve been thinking about this question, and I think my answer is no, except if the parties have an agreement or EFI order in place where they agreed to both use TAR to reduce costs, because there’s always a burden and proportionality argument when it comes to discovery because the costs are so high, and so the only reason I can think of a court compelling parties to use TAR, because it’s just a methodology to look through documents and pursue documents, is if the parties agreed to use it, and then one party changed their mind, and they want to compel, so I can’t think of another reason why the court would compel a particular methodology, especially if it comes with appropriate validation, which is usually what the court is looking for. The parties decide how they produce documents, the receiving party gets to review the results and complain about it or not, but they don’t usually get into compelling parties in terms of how they do that. As long as it’s validated and appropriate.
Doug Austin
Yes. No, that’s… I mean, we’ve certainly seen [conclusive] case law that has not required parties to use TAR against their will, so certainly, I think we’ve got well established points there. So, when parties do decide to use TAR, opposing parties tend to want a lot of information about the TAR process that they don’t normally request when parties use search terms. So, what recommendations do you have for our audience to address an opposing party’s request for discovery about discovery?
Vazantha Meyers
So I think that in terms of sharing information about… like we’ve talked about the court will look for validation, appropriate processes, and I think that a lot of times what’s come up now in recent requests that I’ve seen from opposing parties when it comes to TAR or information discovery on discovery, there’s a pushback when it becomes about substantive questions. So we have some cases where the opposing parties asked me to sample non-responsive results or non-privileged results, etc., so you get into substance. I think that parties can answer these questions about processes and validations, just by having a non-substantive process available for opposing parties to see. One of the things that we’ve done in some cases is, when we get questions on TAR analytics, we have very standard documentation that details the process, the methodology, but it doesn’t get into substance. You don’t get to see the documents. You don’t get to sample the documents, but you can ask us questions about the process and the validations and the checks that we go through, and that’s an easy way to answer that question without giving up substance, or without creating a situation where you’re getting into discovery on discovery over and over. So, this is how we advise our clients to answer those questions. Also, agreement, right? We’ve done this through search terms. We’ve done this through litigation on search terms. A lot of it can be taken care of in the beginning of the process, and I know we’re going to get into some cases of success a little bit later, but discuss what’s going to happen with the methodologies upfront, and then hopefully you don’t have discovery on those [inaudible].
Doug Austin
Well, usually, you’re hoping not to get into discovery about discovery unless there’s a reason to… like the party is not meeting their obligations, as those are usually the times you’re seeing like we most see [inaudible] about discovery of that discovery.
So there’s a question from the audience with regards to TAR compulsion. So they’re asking what if the opposing parties have a cost-sharing agreement? Could TAR be compelled then? V, any thoughts on that?
Vazantha Meyers
Yes. So it’s interesting because one of the things that came up in this case is where the court was saying we can’t compel you to use TAR. However, what the court did say, and I think this covers this question in part, is that if we start talking about proportionality and burden, I’m going to not look favorably on you if you chose a methodology that cost more. So most of the times… at least as it’s black letter law, now the TAR can be used, and most of the time it’s being used because it’s the most cost efficient, and the most accurate use of reviewing documents, and so when you get into a situation where you’re sharing costs and you choose a methodology that costs more, the court won’t look favorably on you, and this is, again, a reason to have these discussions upfront when you’re into a situation where you’re sharing the burden of discovery or the cost of discovery, is to have those conversations about what’s going to be the cheapest methodology, the cheapest process and choose that, but also understand that if you have to then go share the costs of the production, or the review, the court might not look favorably on you if you chose a methodology that was not cheaper.
Doug Austin
Yes. That’s a fair point, and another question from the audience. This is from the flipside if you will. In multi-party litigation, would a party only be able to use TAR if all parties agreed? Can one party impose a veto on TAR use on all other parties? I certainly have my thoughts, but, V, what are yours?
Vazantha Meyers
I think we’ve seen this, and I can’t think of a case right now, but hopefully, maybe we can update the audience later, but I believe that the ruling was that if there was multi-party litigation and other parties all agreed to use TAR, then they agreed to it, but I don’t think that one party can impose a veto on TAR if another party decides to use it, so I think that’s the answer. I think that’s already in case law.
Doug Austin
Yes, absolutely. I think if I remember correctly, I’ve covered at least one or two cases where a party tried to keep the other side from using TAR, and that was objected to, so when it comes to compelling methodology, pretty consistent case law to say, unless there’s a valid reason otherwise, we’re not going to curtail the methodology that producing parties use. So certainly in this case, I can’t think of an instance where I’ve seen a party actually impose a veto on TAR’s use, nor have I seen one where they’ve been compelled to use it. So, it’s certainly an interesting area, and we’re certainly seeing some interesting cases on it. So, great discussion and appreciate the questions from the audience.
So we’ll move onto a couple of cases related to form of production that have similar circumstances and different results. In Corker v. Costco Wholesale, the plaintiffs objected to the form of production say the defendants produced a 2,269-page document that appeared to be a spreadsheet converted into a static PDF, with significant redactions, including sales information that related to the plaintiffs’ coffee brand. In response, the plaintiffs filed a motion to compel production of the spreadsheet [as set in the ordinary course of] business and without redactions, ruling that the protective order that was already agreed to by the party’s limited review to plaintiffs’ outside counsel, Washington District Judge Robert Lasnik granted the plaintiffs’ motion to compel the defendant to product the document in its original native Excel format without redactions, and also granted the plaintiffs’ motion to seal the document for confidentiality reasons.
However, in Lundine v. Gates Corp. – I apologize here. A couple of people have mentioned my audio has diminished. I will find and see what I can do about that, so I apologize, folks. When the plaintiff on behalf of the class in Lundine vs. Gates Corp. filed a motion to compel the defendant to produce ESI of the class member pay data in Excel format or to allow their experts access to the defendant’s payroll data, to download the data themselves, Kansas Magistrate Judge James O’Hara, depicting the situation as a “classic case of what happens when lawyers (even good, experienced lawyers such as those involved here) don’t spend the requisite time on the front end of a case nailing down how discovery of ESI will be handled”, denied the plaintiffs’ motion to compel.
So, V, I may connect off here and then dial right back in. These are similar cases. What was different that caused the motion to be granted in the first case and not the second?
Vazantha Meyers
So I know that in Lundine the judge focused on agreement, and we’ll talk about that a little bit later. So the parties did not agree to produce an Excel, and so they missed out on their opportunity to get the judge to then compel them to produce the documents in Excel, but I think that the key factor in these cases, and the turning point for both of those cases, is the fact that the document was not in usable form versus unusable form. When I read this first case and read that there was a document that was 2,269 pages of PDF that was redacted in certain places, I understood exactly what that nightmare looks like. So we have a PDF that’s a printout of the spreadsheet, and I note the headers and columns were all distorted and the document was redacted, and so the court ruled that that’s not a usable form of that document; that they produced a document maybe by agreement, but the document wasn’t usable to the receiving party, and so, therefore, they had to produce it in native form; versus the second case where they didn’t have an agreement to produce it in native, and the judge ruled that you didn’t have an agreement and the document is usable to you, therefore, we’re not going to compel that you produce that document in native form. I think that’s the turning point, is the document was… one document was usable to the receiving party versus the second document, or the first document was not usable to the receiving party.
Doug Austin
That makes sense, and hopefully, everyone can hear me better now.
Vazantha Meyers
Yes, sounds better.
Doug Austin
Great. OK, good. So what would you recommend to our audience to give them the best chance to receive the form of production they desire?
Vazantha Meyers
I mean, I think the court has made it clear. One, negotiate how you’re going to produce your documents, have an ESI order in place, and produce it accordingly, and also be mindful of the usefulness of the documents that you’re producing. You can make those decisions up front. If you know you’re producing a document that’s 2,000 pages long, 2,000 plus pages long, and you’ve redacted it, and it’s a spit-out of the spreadsheet, you’re asking the other party to come back and complain about that document, particularly if it has relevant information that they need to parse out, and you can make a decision on how to produce that document in a way that’s useful to the other party, for example in terms of spreadsheets, and we do this because we know it’s difficult for spreadsheets that we use technology that allows us to produce native documents that we can redact. So we can redact those documents and produce them as a spreadsheet versus a PDF, and so just be mindful of how you’re producing documents and then negotiate up front how you’re producing documents.
Doug Austin
Yes, well, that’s great advice, and actually, Excel files are getting redacted more and more in their native form, because most people prefer to get the Excel files produced in their native form. They’re just so much more useful that way. So that makes perfect sense, and you certainly want to get that discussed upfront. So that’s great advice.
So moving onto our next case in New York Machinery v. The Korean Cleaners Monthly, instead of the issue being that the production was lost in translation, it was the production wasn’t translated at all. The plaintiffs wrote to the defendants asserting various deficiencies in the defendants’ discovery responses, including the expectation for “Defendants to promptly produce certified translations of these documents.” While New Jersey Magistrate Judge Edward Kiel noted that “Rule 34 does not address which party has the obligation to translate documents into English”, and also noted that “There is no clear answer in the Third Circuit”, he still denied the plaintiffs’ request to have the defendants translate the documents, or shift any of the costs for translating the documents to the defendants, stating: “Plaintiffs do not claim that the documents produced by Defendants in response to Plaintiffs’ discovery demands are irrelevant” and that “to satisfy their obligation under Rule 34, Defendants produced all documents responsive to Plaintiffs’ request, including the foreign language documents at issue”. So, V, the court here stated that Rule 34 doesn’t address translation responsibility, but actually Rule 34 (a)(1)(a) does state an expectation of ESI to be produced “after translation by the responding party into a reasonably usable form”. Do you think that should include foreign translation of documents?
Vazantha Meyers
No. So, I think that translation, as is used in Rule 34, doesn’t mean into English. So I don’t think that that’s what that means. I think that means when you’re producing a document to a receiving party that it should be in usable format. We’ve talked about that a little bit earlier in the previous case, so I don’t think that making it readable in the language of their choice is necessary. I think that in the same way that we… and we’re going to talk about this a little bit later, but in the same way that we have to review the documents, and we have to use translation or foreign language speakers, etc., to get through those documents, as long as we give those documents to the other side, and they can do the same, I think that’s a reasonable form, and I know that the court went through a lot of factors in making that decision, meaning like if the producing party made it hard for the other side to get through those documents, meaning it was late, or there was a whole bunch of irrelevant documents, etc., maybe the court would have changed their mind in terms of at least the definition of usable form, at least shifting the cost burden, but I think in this case, it didn’t require foreign language translation. That’s the other side’s responsibility. And if in this form that it’s contained, or maintained, so the normal course of business version of those documents is what they received.
Doug Austin
That’s true. That’s an excellent point. So I’m sure you’ve had cases with foreign language documents before. How have you and HaystackID dealt with challenges related to foreign language documents in your cases?
Vazantha Meyers
So we have a robust review division that can staff foreign language reviewers, and we can get through the documents that way, and we also employ the use of machine translation to get through those documents. So there are ways that we… it’s not a challenge. It’s just the way we get through documents. If we need someone who has a background in patent law, we’ll hire that person to get through the documents in Korean. We can also utilize machine translation. It’s not perfect, but at least helps you call data so that before you get it to a person to at least make it producible. So that’s the way we deal with it, and then also by negotiation. When you’re going through the ESI and you make a decision on the types of data you have, you can make a decision on what you produce and what you won’t produce, so all of those come into play when we’re looking at foreign language documents.
Doug Austin
Yes, so once again, addressing these issues upfront is always a really good approach to getting out in front of them, certainly, so thanks, V.
All right. Our next case is a case where a party tried to use GDPR to protect them from responding to discovery requests. Giorgi Global Holdings, Inc. v. Smulski was a RICO case involving claims of fraud, breach of contract, and so forth against the defendant. The plaintiffs in this case requested via letter that defendant Wieslaw Smulski be ordered to produce documents in compliance with the Federal Rules of Civil Procedure without regard to Polish law and/or GDPR. But defendant Smulski claimed that he couldn’t produce otherwise discoverable documents in the case because the GDPR and/or Polish privacy law prohibited him from doing so. What you see in the slide is that Pennsylvania District Judge Jeffrey Schmehl ruled that the defendant, who was “an American citizen sued in the United States, bears the burden of showing that the GDPR and/or Polish privacy bar production of…relevant documents”, which “he cannot do”. But if you go to the case write-up, you’ll also see that Judge Schmehl [used a five-part balancing test] which was developed in part by SCOTUS [in 1958] to determine whether the interests of the domestic order outweigh those as a foreign sovereign can make in his ruling.
So, V, although this defendant lived in Poland, he was an American citizen. Do you think the ruling might have been different if he wasn’t an American citizen?
Vazantha Meyers
I think the jurisdiction ruling might have been different because one of the things that the judge said is that he was subject to the jurisdiction of this court. So I’m not too sure what all the factors were in making that decision in terms of the jurisdiction, but I think maybe that ruling would have been different. However, in terms of making a decision on whether or not he should produce those documents, using the five facts or tests that he laid out, citizenship wasn’t one of them, right? The judge asked questions and looked at the factors, and I think the most compelling factor was that it… was the document was important to the outcome of the litigation, and so I think that it might have been a jurisdiction factor, but it wouldn’t have been a ruling in terms of whether or not he should produce it in light of the law, the GDPR law.
Doug Austin
Yes, I agree. I think the five-factor test would still have weighed in favor of production, even if he wasn’t an American citizen. Do you have any recommendations for our audience on how to handle discovery from international parties?
Vazantha Meyers
Know the law. Privacy laws are changing, and in terms of… a lot of times, we talk to our clients about having agreements in terms of how to handle data. This one is a little bit different because it’s personal, criminal, fraudulent activity that a person has… that the individual is seeking to protect information for his own personal gain, so this might not apply to a lot of our corporate clients. However, one of the things that we’ve been talking to our clients about is having agreements with their employees about how to handle data in light of GDPR, so we keep talking about this upfront discussion about how to handle it, and understand the burden, the factors. This is a five-factor test, and whether or not your need to have that information, or produce that information, or collect that information, or store that information outweighs the need of privacy, and that changes across different countries, and so one of the things that we’ve been doing as the laws change and different countries have different privacy laws is to understand exactly what the balance is between the need for privacy and the need to have those documents or use those documents or produce those documents.
Doug Austin
Yes, no, that makes sense, and one thing for sure about privacy considerations is they’re certainly continuing to evolve and change, so it pays to stay on top of how the laws are evolving and changing and what sorts of rulings come down about them, for sure, so thanks V.
Now, let’s shift into a discussion of sanctions requests -audio -ESI. EPAC Techs., v. HarperCollins Christian Publishing originally stemmed from a contract dispute when the defendant prematurely terminated a Master Services Agreement it had executed with the plaintiff, which of course – because this is America – used the defendant. Most claims were thrown out before trial, with only two claims going to the jury, breach of the MSA and fraudulent concealment. The jury returned a verdict in the plaintiff’s favor on both claims, awarding $3 million in compensatory damages for the breach of the MSA claim, as well as $60,000 in compensatory damages and $12 million in punitive damages for the fraudulent concealment claim, but the District Court granted judgment notwithstanding the verdict in the defendant’s favor on the fraudulent concealment, finding that the defendant did not have a duty to disclose, which is necessary to maintain a fraudulent concealment claim. So nobody was happy with the result and both parties appealed the ruling.
The notable ruling here by the Sixth Circuit related to the defendant’s argument that it was entitled to a new trial because it was unfairly prejudiced by to adverse inference instructions given to the jury. The court disagreed stating, “District courts have broad discretion to craft sanctions for spoliated evidence”, and also that the “District Court didn’t err in issuing the above two jury instructions and the fact that Thomas Nelson was only ‘negligent’ does not defeat the adverse inference instructions”.
So Ashish, should courts have brought discretion to issue sanctions for spoliation. Isn’t that what the rule 37(e) 2015 were supposed to lockdown?
Ashish Prasad
Doug, clearly, the courts should have brought discretion to issue spoliation sanctions. Rule 37(e) needs to be understood against the backdrop of what came before. Prior to the 2015 amendments to the Federal Rule of Civil Procedure governing electronic discovery, there were few, if any, meaningful limits on the District Court’s ability to impose sanctions for discovery non-compliance. Rule 37(e) did put limits on the ability of courts to issue sanctions, but it’s important to recognize that the backdrop was almost no limits and even after Rule 37(e)’s amendment, there still is the concept of the inherent power of the court to manage its docket and take steps necessary to do that, and there are cases out there that have held that the court’s inherent power exists and is not necessarily cabined by Rule 37(e).
I have always felt that if a court wanted to do something that Rule 37(e) maybe suggests shouldn’t be done, that it could do so under its inherent authority. There are people who, at the Rules Committee Process, plead that the 2015 amendments (me included) there, but there are people who express that view from the bench.
I think we are still in a world, despite Rule 37(e)’s amendment in 2015 of courts having broad discretion to issue sanctions. I do not think we are ever going to lead that world and I think parties that are seeking to kind of skirt the line on discovery and maybe not comply with discovery in the hope that their non-compliance will be deemed negligence rather than intentional misconduct, I think those parties are taking a very big risk and are not likely to be rewarded for that risk. I think they are likely to get the full range of sanctions, even if one might say that what they did was negligent as opposed to intentional misconduct and that’s going to come up in the John v. Lake case that we talk about in a few minutes.
Doug Austin
That’s a great point, Ashish. Certainly, was the takeaways with what happened in this case. So based on this ruling, what advice would you give our audience regarding pursuit of spoliation sanctions?
Ashish Prasad
The only advice that I would give is the commonsense advice that every lawyer on the call would know anyway, but it’s usually good to hear it repeated. I would say that if you are a party that is going to be seeking spoliation sanctions, you should be very well prepared for that. You should have a very strong documentary record of that, and you should not seek the sanctions unless you have a strong record and have a good case. Courts, in my experience, don’t like these kinds of motions and they certainly do not want to deal with them if it’s a weak case. I think a party that brings a spoliation motion in the hopes that it will ratchet up leverage on the other side, or somehow poison the court’s thinking towards the other side, I think that party shouldn’t be doing that unless there’s truly a strong basis. If there’s not a strong basis, that type of strategy can easily backfire on a party.
Doug Austin
That makes perfect sense. You certainly don’t want to… I covered a case just a couple of weeks ago where the party who brought sanctions requests were actually reprimanded for those sanction requests having no basis. Certainly, you don’t want to run the risk of falling afoul of the court’s favor by just willy-nilly flying them out there without good justification, so great point, Ashish.
Speaking of the John v. County Lake case you mentioned, here we are. It’s our final case and it involved claims by the plaintiffs of unlawful search and excessive force by the defendants who are law enforcement officers attempting to locate a family member of the plaintiffs who is the subject of an arrest warrant. After earlier filing administrative claims against the county, the plaintiff filed this suit against the county, the City of Lakeport, and several law enforcement officers. On 14 February 2019, the District Court in the hearing addressed plaintiffs’ concerns about the defendant’s unwillingness to confirm that they were preserving evidence pursuant to a litigation hold stating, “Anything that relates directly to the case, like emails, text messages, voicemails, memos, handwritten notes, they should be preserved. And any document-destruction program should be interdicted in order to stop it. And if you fail to do that, on either side, then very likely the jury will be told”. You have a duty, as the lawyer, to tell your clients that, so please do so.
Despite that, the plaintiffs struggled to get ESI from the defendants who initially represented that the individual defendants didn’t use their cellphones to communicate about the incidents, but eventually it produced an ESI from their cell phones. Also, when the plaintiffs took the deposition to Lake County’s IT director, he testified that the first time he had been asked to put a litigation hold on emails or the officers was the day before his deposition, and he had never been asked to put a litigation hold on any other employees’ records or repository and that as, IT director, he would know that a litigation hold had been made.
As a result, California Magistrate Judge Sallie Kim ruled that “Defendants or their counsel breached their obligations to provide discovery and that monetary sanctions are appropriate”, and those monetary sanctions were estimated to be at least $105,000. Judge Kim also recommended that the District Court provide an adverse inference instruction to the jury at trial.
So, Ashish, it seems as though the court’s ruling as [inaudible] in this case stems from explicit court instructions earlier to build evidence. Do you think they would have gotten the same sanctions without the court instructions?
Ashish Prasad
I don’t think the same sanctions would have been issued without the court’s explicit instructions, but I do think some sanctions would have been issued. This case is a very interesting case. If you actually read the case, I always try to look behind what the court is saying and try to get to what actually happened. My guess is that there were some steps taken by the preserving party to preserve. Clearly, it’s bad that certain witnesses weren’t even informed of the hold until right before the deposition and so on, but I have to believe – just based on my experience – that some steps had been taken to preserve. The interesting thing is in that light, OK, this case becomes a case about timeliness of notice of the litigation hold. Ordinarily, one might think that the difference between putting a hold in place within a few days of notice of the case and maybe within a few weeks or months of notice of the case would be a matter of negligence not intent to deprive the party of evidence.
It’s very interesting here that what the court did was say that because I issued this direct order to you to preserve, I’m going to say that there was an intent to deprive. Even under the common law, there should be an equally strong basis for that obligation to preserve has been triggered just by notice. We have decades and decades of common law that says that your duty of preserve arises upon notice and there’s a lot of policy and other reasons from that. So I think this case is very interesting and maybe shows that intent to deprive is going to be imputed, even if you’re an area where, historically, it might have been regarded as negligence.
Now, I’m reading maybe more into it than is deserved and I acknowledge that. We don’t have all of those details, but I think the practice pointer for the people in the audience is that, obviously, if you’re going to have notice of a matter that requires preservation, get that hold out soon. I think the “immediately” was used by the court, but immediately isn’t really… I think the standard, usually there is a reasonable time and we have a lot of law supporting the idea that a reasonable amount of time is permitted to get the notice out.
And then just harkening back to the comments I made about the EPAC Techs case five or seven minutes ago, it’s so interesting when you take this case and put it into context the advent of Rule 37(e) and deprived standard for the more significant sanctions was to cabin the District Court’s power to issue sanctions that are more draconian, in those situations where there was bad conduct, willful conduct. Well, here you see a very clear example of how that intent is not exactly what’s going on, because what’s going on here is that what might have been called negligence is just being called intent to deprive.
To me, what this shows is what I talked about in the last case, which is that you have to kind of keep your nose clean on all of this stuff when it comes to the courts. You can’t just read that rule and think that as long as it’s just negligence, we’re OK, it’s just going to be steps narrowly tailored to cure the prejudice. I think, in practice, and most practitioners would agree, in practice, you still have to be extremely careful, because the court can largely do what it wants, and that’s partially by design.
So that’s what I would say. Sorry to be a little longwinded, but I really find this case super interesting.
Doug Austin
It really is. Thank you, Ashish. That’s certainly great analysis. Certainly, one thing you don’t want to do is if the court specifically orders you to preserve information, failing to do so is not a good look. That’s certainly true. We are past the top of the hour. We do have an additional question from the audience, I will touch on it real quick.
Last month, the European Court of Justice invalidated the EU-US Privacy Shield in Schrems II. I was wondering if you’re seeing any immediate consequences or anticipate additional difficulties as far as transfer of data, data processing or production and reviews is concerned. I will just open that up to either of you, or Ashish, either you or V if you have any comments about that.
Vazantha Meyers
This is a good question and I don’t think that we’re seeing any immediate consequences or difficulties, but it’s become a part of the conversation for every project that we start that involves EU data. I actually don’t have enough information to say that we’ve had consequences or difficulties, but we anticipate them, and we’ve been… it’s been a part of our conversations for every project that we start.
Doug Austin
Certainly, this is not the first time that Mr. Schrems has invalidated a privacy agreement between the EU and the US. Basically, with regards to the safe-harbor, so the privacy shield was put together pretty quickly after the safe-harbor was invalidated. Now, obviously, this has been invalidated too, so maybe they should loop Mr Schrems into the next one and maybe get one done that other people feel privacy is being better protected, so we shall see.
Thanks to the audience for all the great questions. We’re a few minutes past. I will turn it back over to Rob to close us out. Rob.
Closing
Excellent, and thank you very much, Doug, Ashish, and Vazantha for the excellent information and insight. We also want to thank all of you who took the time out of your schedule to attend today’s webcast, because we know how valuable your time is and we appreciate you sharing it with us.
We also hope you will have an opportunity to attend HaystackID’s monthly webcast in September. It will be on 16 September at 12 p.m. Eastern Time and it will be on the topic of Hatch-Waxman Matters and eDiscovery. Please check out the detailed description of this upcoming webcast on our website, and we hope you can attend. With this, I would like to thank you again for attending and have a great rest of the day and week.
This concludes today’s webcast.
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