Litigants have become all too aware in recent years that their electronically stored information (ESI) may lead to increased costs during the discovery phase of civil lawsuits in federal court. With the recent amendments to the Federal Rules of Civil Procedure, which went into effect in December of 2006, electronic discovery has received a great deal more attention. But specifically, how much do you really know about your obligations under the new rules? What exactly are the consequences for failing to meet these obligations? And what does electronic discovery involve anyway?

These were some of the subjects addressed by Bricker partner Alan Ross and associate Greg Krabacher at the 17th Annual Seminar on Significant Developments in Computer and Cyberspace Law, hosted on June 8 by the University of Dayton School of Law.

“The talk was essentially a survey of recent cases that show how the courts are beginning to address the issues under the new rules,” Ross said. Questions from the audience brought home the reality of the problem caused by ESI.

“We received several questions related to when a company may be subject to a duty to preserve,” Krabacher said. “In evaluating each unique situation, companies really need guidance on how the courts have reacted under similar circumstances. Otherwise, they are bound to make the same mistakes.”

Summary of the presentation

The case law since the advent of the e-discovery rules has highlighted the importance of acting  promptly to preserve both a party’s own evidence and that of its adversary in litigation. The importance of acting promptly to preserve a party’s own evidence was emphasized in Reino De Espana v. American Bureau of Shipping, where the court found the plaintiff to have spoliated evidence by waiting six months after filing the Complaint to send a preservation notice to its agencies. Several cases held that the duty to preserve evidence attaches upon the filing of the Complaint, while Floeter v. City of Orlando held that in the Eleventh Circuit, that is an open question. The Floeter case illustrates the importance of sending a preservation demand letter with the Complaint, or immediately upon receipt of the Complaint, if a defendant. In a related issue, the court in Griffin v. GMAC Commercial Finance, Inc. held that it was understandable that the defendant had not recognized that certain documents, which had been destroyed, were relevant, given that they were somewhat unrelated to the issues raised in the Complaint. This case points out the importance of notifying the adversary of the potential scope of relevant evidence at the outset of the case, if not before.

Several cases focused on the consequences of spoliation. In Miller v. Holzmann, the court held that the sanction of dismissal requires proof by clear and convincing evidence of flagrant or egregious conduct. In PML North America v. Hartford Underwriters Ins. Co. and Quantum Communs. Corp. v. Star Broad., the courts awarded default judgment for tampering with evidence on hard drives (PML) and for failing to produce “smoking gun” documents (Quantum).

The courts sent mixed messages regarding obtaining mirror images of hard drives. In Balfour Beatty Rail, Inc. v. Vaccarello, the court denied such a request, labeling it a fishing expedition. In Hedenburg v. Aramark American Food Services, the court held that the common thread in cases permitting the inspection of hard drives is the fact that the contents of the computer go to the heart of the case. The court in Cenveo Corp. v. Slater followed the court in Ameriwood Indus., Inc. v. Liberman and authorized a protocol that involved imaging the adversary’s hard disks and recovering anything and everything that was on the disk. The Cenveo court seemed unaware that the parties in Ameriwood had returned to the court asking for relief for what they correctly perceived as an onerous undertaking. ‘Be careful what you ask for’ was the morale of those two stories, emphasizing the importance of understanding forensic principles.

Finally, in Lorraine v. Markel American Insurance Co., the court set forth the parameters of authentication and admissibility of electronically stored information. For electronic business records, the court adopted a procedure first proposed by Prof. Edward J. Imwinkelried, UC Davis.

For email, the court explained every conceivable way in which email can be authenticated. The court also gave substantial treatment to hearsay and other evidentiary issues peculiar to ESI.

The foregoing is a brief summary of a lengthy treatment of the post December 2006 e-discovery case law. There is much more available in the full papers: litigation/edisco2007.pdf

as well as their PowerPoint presentation: litigation/edisco.mht