Technical Sales Associates, Inc. v. Ohio Star Forge Co., 2009 U.S. Dist. LEXIS 22431 (E.D. Mich. March 19, 2009).

Take Away: Despite a perception that e-discovery issues have been largely limited to certain regions (i.e. New York and California), these perceived regional limitations should be rapidly coming to an end. Federal courts nationwide, indeed, all courts nationwide are facing increasing numbers of e-discovery cases. Perhaps the only litigants dealt with more harshly than those who simply refuse to accept the changing face of discovery and technology, are those who attempt to circumvent e-discovery. The district courts of the Sixth Circuit are no exception, as this case from the Eastern District of Michigan proves.  

United States District Judge Avern Cohen of the Eastern District of Michigan ordered considerable sanctions on a party in Technical Sales Associates, Inc. v. Ohio Star Forge Co., 2009 U.S. Dist. LEXIS 22431 (E.D. Mich. March 19, 2009). A dispute over sales commissions led to two separate cases where Plaintiff Technical Sales Associates (“TSA”) moved for sanctions against Defendant Ohio Star Forge Company (“OSF”).

TSA intended to identify and obtain e-mails between three individuals regarding a meeting at which TSA alleged discussions were held to eliminate TSA’s commissions. TSA was certain the emails existed (presumably it already had copies of some of these) but received no emails from OSF in response to its discovery request. TSA’s next step was to seek a forensic examination of OSF’s hard drives by a third party consultant. The parties agreed to a stipulated order, whereby the consultant imaged the relevant machines, performed keyword searches for a limited date range, and was to produce the emails retrieved from the search to OSF for their priviledge review prior to the ultimate production to TSA. Only the consultant did not find any responsive emails with the agreed search. What it did find, however, was that approximately 70,000 files were deleted using a tool called “Eraser” in April 2008, during the discovery period. Further, the consultant discovered that one of the relevant individual’s computers files had been deleted or moved from the inboxes to the recycling bin – at 2 a.m. the day after the Court entered the stipulated order and only days before the examination.

OSF attempted to invoke the safe harbor provision, arguing it had deleted the 70,000 files in the ordinary course of business because the computer had “severe operational issues.” OSF further argued that all necessary files were transferred to the relevant individual’s new workstation. The Court disagreed, and after setting forth a detailed timeline of events, found OSF had intentionally destroyed electronic information on computers after it had been requested. The Court also noted that moving responsive e-mails into the recycle bin, while still retrievable, may have changed the e-mails’ dates and could result in those e–mails moving outside the range of Midwest’s search terms. Additionally, the Court stated that the safe harbor provision applies only to the routine, inadvertent overwriting or deletion of evidence, not when a party intentionally deletes information.

The Court ordered a monetary sanction in the amount the forensic examination costs - $17,786.25. This amount could change, however, dependant on the substantive harm done to TSA, determinable at trial. Equally, the Court abstained from ruling on TSA’s entitlement to an adverse jury instruction until trial. Nevertheless, whatever OSF’s final sanction, as of the date of this decision OSF likely spent time and money attempting to circumvent e-discovery, only to end up paying for the very forensic examination it sought to impede. Additionally, judging by the Court’s language, an adverse instruction in TSA’s favor seems likely.

The obvious lesson here is: don’t try and circumvent court-ordered discovery, electronic or otherwise. The other lesson, which some parties appear to prefer learning by way of judicial rebuke, is that e-discovery is not something that’s only happening in New York and California in cases dealing with technology. E-discovery, and its accompanying possibility of sanctions, is everywhere.

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