This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

  1. a U.S. District Court for the Western District of Kentucky ruling allowing defendants to obtain information from plaintiff’s social media but limiting such production to matters relating to the accident at issue, plaintiff’s emotional state and injuries, and level of activities prior to the accident
  2. a U.S. District Court for the Northern District of Florida opinion rejecting plaintiffs’ theory that industrywide events could trigger document retention obligations in denying plaintiffs’ spoliation motion based on defendant’s disposal of 2002-06 emails after a 60-day retention period
  3. a U.S. District Court for the Middle District of Florida decision overruling defendants’ burden objections after plaintiff introduced expert declarations challenging defendants’ estimates of the time and cost of complying with discovery requests
  4. a U.S. District Court for the Southern District of New York case ordering an adverse inference instruction and awarding attorney’s fees after concluding that defendants had intentionally spoliated evidence by running “cleaning” software on computers, deleting relevant text messages and failing to preserve the contents of a computer from the office of one of the defendants

1. In Locke v. Swift Transportation Co., 2019 WL 430930 (W.D. Ky. Feb. 4, 2019), Magistrate Judge Lanny King allowed defendants to obtain information from plaintiff’s social media accounts but limited such production to matters relating to the accident at issue, plaintiff’s emotional state and injuries, and level of activities prior to the accident.

Plaintiff sued after allegedly being injured in a car accident. Defendants sought discovery into plaintiff’s activities and mental status, including by requesting “a record of Plaintiff’s social media activities, including a download of Plaintiff’s Facebook account, for April 26, 2016 and the six month period afterwards.” Id. at *1. Plaintiff refused, and defendants filed a motion to compel.

The magistrate judge stated that “certain parts of social media activity are discoverable, provided there is a sufficiently specific reason for the discoverability of the information.” The contours of discoverability are governed by Fed. R. Civ. P. 26 and 34. Rule 26 allows for discovery of any nonprivileged information relevant to a party’s claim or defense. While relevance is broadly defined, it is not unlimited, with the trial court being given “wide discretion in balancing the need and rights of both plaintiff and defendant.” Id. at *2 (quoting T.C. ex rel. S.C. v. Metro Gov’t of Nashville & Davidson Cty., 2018 WL 3348728 at *5 (M.D. Tenn. July 9, 2018)). According to the magistrate judge, Rule 34 requires the requesting party to describe the material with reasonable particularity and provides that the request “must be ‘proportional to the needs of the case.’ ” Id. (quoting Fed. R. Civ. P. 34). “All-encompassing demands that do not allow a reasonable person to ascertain which documents are required do not meet the particularity standard of Rule 34(b)(1)(A).” Id. (quoting Roach v. Hughes, 4:13-CV-00136 (W.D. Ky. May 7, 2014)).

The magistrate judge noted that discovery into social media is still an evolving area of law; however, “social media information is treated just as any other type of information would be in the discovery process.” As with most other areas of discovery, complete access is “too wide a net,” as it would allow inquiry into irrelevant and “quasi-personal” information — “Defendant is no more entitled to such unfettered access to plaintiff’s personal email and social networking communications than it is to rummage through the desk drawers and closets in plaintiff’s home.” Id. (quoting Ogden v. All-State Career School, 299 F.R.D. 446, 450 (W.D. Pa. 2014)). Thus, the magistrate judge explained, wholesale production of social media is usually not appropriate. “[T]hat a claimant has had social communications is not necessarily probative of the particular mental and emotional health matters at issue in the case. Rather, it must be the substance of the communication that determines relevance.” Id. (quoting Rozell v. Ross-Holst, 2006 WL 163143 (S.D.N.Y. Jan. 20, 2006)). Citing Gordon v. T.G.R. Logistics, Inc., 321 F.R.D. 401, 405 (D. Wyo. 2017), he determined that the defendants’ requests went too far but found them to be partially justified to the extent that they were limited to “Plaintiff’s emotional state, the accident and its aftermath, and any of her physical injuries, as well as her Facebook history attesting to her levels of activity prior to the accident.”

The magistrate judge therefore granted defendants’ request in part, requiring defendant “to identify, with specificity, what information it particularly seeks from Plaintiff’s Facebook and other social media accounts.” Id. at *4. Upon receipt of the defendants’ requests, “Plaintiff, with the assistance of counsel, will review the account for such information and either provide it to Defendant or to make an objection with specific grounds for the objection to production.”

2. In In re Abilify (Aripiprazole) Products Liability Litigation, 2018 WL 4856767 (N.D. Fl. Oct. 5, 2018), Magistrate Judge Gary R. Jones rejected plaintiffs’ theory that industrywide events could trigger document retention obligations in denying plaintiffs’ spoliation motion based on defendant’s disposal of 2002-06 emails after a 60-day retention period.

The dispute in this products liability litigation arose when defendant Otsuka America Pharmaceutical Inc. (OAPI) informed plaintiffs that it could not locate any emails from three custodians from 2002-06 because prior to April 2007, OAPI had maintained a 60-day retention policy for emails. Plaintiffs argued that the deletion of these emails constituted spoliation, entitling them to sanctions under both Fed. R. Civ. P. 37(e) and the court’s inherent authority. As relief, plaintiffs sought an adverse inference instruction at trial or an order prohibiting OAPI from raising the lack of early notice or using the lack of earlier evidence to challenge plaintiffs’ claims about adverse effects from the drug Abilify. Plaintiffs also asked for permission to introduce evidence at trial about the deletion of these emails and for leave to add a spoliation cause of action under state law.

Magistrate Judge Jones stated that the law applicable to destruction of electronically stored information (ESI) is controlled by Rule 37(e), which authorizes sanctions when four conditions are proven: (1) the ESI should have been preserved in the anticipation or conduct of the litigation; (2) the ESI is lost; (3) the loss of the ESI is due to the party’s failure to take reasonable steps to preserve the ESI; and (4) the ESI cannot be restored or replaced through additional discovery. If the answer to any of these questions is “no,” the motion for sanctions must be denied.

The magistrate judge noted that the duty to preserve arises only when litigation is pending or reasonably foreseeable. Mere awareness of potential liability is insufficient — rather, litigation must have been contemplated. Citing the Sedona Conference Commentary, he stated that “reasonable anticipation of litigation” arises only when “an organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates litigation, or when it takes specific actions to commence litigation.” Id. at *3 (quoting The Sedona Conference Commentary on Legal Holds: The Trigger & The Process, 11 Sedona Conf. J. at 269.).

Plaintiffs asserted that litigation was reasonably foreseeable between 2002 and 2006 because of industrywide events in the pharmaceutical sector relating to other drugs. The magistrate judge pointed out that “there are problems with this position.” First, the Eleventh Circuit has never adopted this argument, and while a 1995 case from the District of Montana involving Isuzu rollover issues had concluded that a duty to preserve existed as a result of industrywide concerns relating to narrow utility-truck rollover problems, the court in that case had confronted the question of whether evidence had been improperly admitted, not whether a party had engaged in spoliation.

Another problem according the magistrate judge was that this theory “improperly places too much emphasis upon events other than those generated by the plaintiff or those who are similarly situated to the plaintiff .... [A]pplying the reasonable foreseeability standard and pinpointing the trigger date when the duty to preserve arises is highly case specific and fact dependent.” In this case, nothing plaintiffs or their lawyers did would have suggested to OAPI that it should have reasonably anticipated their suit during 2002-06 — plaintiffs’ counsel did not begin advertising for plaintiffs until 2013, did not threaten suit against OAPI until October 2014 — over a decade after many of the emails were deleted — and did not actually file suit until January 2016. The earliest OAPI could have reasonably anticipated litigation is when it first learned that claims might be filed in 2013 or 2014.

Plaintiffs, however, argued that OAPI should nevertheless have anticipated litigation because of findings from certain scientific publications, lawsuits concerning other drugs and information OAPI received in adverse event reports. The magistrate judge was not persuaded by these arguments. The scientific literature, which relates to other drugs, may have been probative to plaintiffs’ theory of the case, but it fell “woefully short of placing OAPI on notice that it would be sued ten years later.” Id. at *4. Similarly, earlier lawsuits relating to other drugs involved different medical conditions and possibly different mechanisms of action (a disputed point in the litigation). Plaintiffs’ overly broad view of the duty of preservation would impose on every drug manufacturer a duty to preserve all of its documents, without regard to subject matter or timeframe. As for the adverse events reported during clinical trials, plaintiffs’ argument “ignores the substance of many of the adverse events report and the fact that the statistical results of the clinical trials were woefully insufficient to place OAPI on notice of threatened litigation.” Indeed, a number of the reports of problems by physicians noted that the patient’s adverse events were not connected to Abilify, nor did the clinical trials suggest the ill effects alleged by plaintiffs.

Plaintiffs also asserted that litigation with the U.S. Department of Justice (DOJ) further supported their theory of notice, comparing their case to a couple of matters involving suits against Bristol-Meyers Squibb (BMS). In one 1995 case, DOJ litigation involving OAPI concerned off-label marketing, not the safety information and side effects of Abilify, the subject of this suit, and in a second case, a 2007 BMS litigation hold (not a hold implemented by OAPI) occurred after OAPI’s implementation of the 60-day retention policy, and there would have been no 2002-06 emails to preserve in any event. In the magistrate judge’s view, the “fatal flaw” in plaintiffs’ DOJ shifting duty claim is that other courts have rejected this argument, finding that a DOJ preservation demand ran only to the DOJ and not to subsequent plaintiffs, citing In re Delta/Air Tran Baggage Fee Litigation, 770 F.Supp. 2d 1299 (N.D. Ga. 2011).

The magistrate judge used similar reasoning in rejecting plaintiffs’ claim that OAPI had retention obligations as a result of preservation requirements imposed by the U.S. Food and Drug Administration (FDA). There was no need, according to the magistrate judge, to consider whether OAPI had complied with the FDA regulations as any duty ran to that agency, not to plaintiffs. The principal case support provided by plaintiffs, Austrum v. Fed. Cleaning Contractors, Inc., 149 F.Supp. 3d 1343 (S.D. Fla. 2016),involved employment discrimination and was clearly distinguishable as the regulations in that case concerned preservation of employment applications, which had an obvious connection to the protection of private causes of action for discrimination.

The magistrate judge also rejected plaintiffs’ contention that contractual provisions between OAPI and a different pharmaceutical company regarding Abilify created a preservation obligation for safety-related correspondence. There was no evidence that the deleted emails fell within this contractual provision, and, more fundamentally, plaintiffs had no legal standing to enforce the requirements of that agreement for their benefit. Further, state cases cited by plaintiffs to seek to establish a preservation duty were not relevant to the analysis of Rule 37(e), which “forecloses reliance on inherent authority or state law to determine when certain measures would be used.” Id. at *8.

Finally, the magistrate judge considered arguments relating to whether the destruction of unspecified hard-copy documents gave rise to spoliation sanctions. He pointed out that the applicability of Rule 37(e) to hard-copy documents was unsettled in the Eleventh Circuit but that it was not an issue that he needed to resolve as there was no evidence of either bad faith or an intent to deprive, which are required to justify an adverse inference instruction under inherent authority or Rule 37(e), respectively. In fact, the evidence suggested that the deletions were routine and based on companywide record-retention policy, not acts designed to deprive plaintiffs of documents over a decade later.

As for plaintiffs’ request to add state-law claims of spoliation, the magistrate judge noted that this was a matter governed by Rule 15, not Rule 37(e), and was not an available sanction. Id. at *9 n.7. He therefore denied plaintiffs’ motion for spoliation sanctions.

3. In Clark v. FDS Bank, 2018 WL 5830421 (M.D. Fla. Nov. 7, 2018), Magistrate Judge Thomas B. Smith overruled defendants’ burden objections after plaintiff introduced expert declarations challenging defendants’ estimates of the time and cost of complying with the discovery requests.

In this putative consumer class action, plaintiff sought to represent several subclasses of persons contacted by defendants to collect debts. Id. at *1. In discovery, plaintiff requested information about the collection calls defendants made in a four-year period, including (1) the phone numbers called; (2) the dialing system used to make each call; (3) the date on which each call was made; (4) the number of times each phone number was called; (5) where defendants got the phone numbers they called; (6) for each call, whether it produced a live answer, recorded message or report of a wrong number; (7) whether the recipient of the call told defendants not to call the phone number again; (8) the account notes concerning each call; and (9) financial information to show when payments for the accounts associated with each phone number were made. After defendants objected to the request, plaintiff moved to compel.

In response to the motion to compel, defendants explained that they could produce the total number of phone calls made, a list of the phone numbers called, the dates and times the calls were placed and whether the call was answered, and the duration of the call. But beyond this, defendants objected to the balance of the request as overly burdensome. Defendants represented that to obtain the remaining information — including account notes documenting payments and call notes documenting whether the customer told defendants not to call the phone number again — they would need to pull and manually review the information for each individual account. To support this claim, defendants had a legal assistant retrieve account information and redact nonpublic, personal information for 28 accounts. Id. at *2. It took the legal assistant 76 minutes to review the account information for 28 accounts and 135 minutes to review and redact personal identifying information for 11 customers.Based on these estimates, defendants projected that it would cost between $1.5 and $1.8 million to comply with plaintiff’s discovery request. Defendants also objected that plaintiff was attempting to create a “fail-safe” scenario that “front-ends a merit determination” of liability because defendants were asked to identify customers who asked not to be called again.

Plaintiff filed a declaration from the principal of a legal technology company that investigates and analyzes electronic data. Id. at *3. In the declaration, the principal stated that he was familiar with the defendants’ databases and could export the data in less than an hour. Plaintiff also provided a declaration from a certified computer forensic examiner that had been filed in a different case. In this declaration, the forensic examiner noted his familiarity with analyzing the types of phone records at issue. The forensic examiner explained that he could design an algorithm for effectively analyzing call notes to determine whether the customer asked not to be called again. Id. at *3-*4.

On the basis of this evidence, Magistrate Judge Smith granted the motion to compel, explaining that plaintiff’s declarations were sufficient to persuade him that the requested records “may not be as difficult to search” as defendants had claimed. Id. at *4. Magistrate Judge Smith ordered the parties and their outside experts to hold a Rule 26(f) conference within 21 days to discuss how to make the data available for search and retrieval by plaintiffs.

4. In Experience Hendrix, L.L.C. v. Pitsicalis, 2018 WL 6191039 (S.D.N.Y. Nov. 28, 2018), Judge Paul A. Engelmayer imposed an adverse inference instruction and awarded attorney’s fees after concluding that defendants had intentionally spoliated evidence by running “cleaning” software on computers, deleting relevant text messages, and failing to preserve the contents of a computer from the office of one of the defendants.

In this trademark and copyright litigation involving the estate of Jimi Hendrix, Judge Engelmayer had been “called on repeatedly to issue orders aimed to assuring [defendants’] compliance with elementary discovery obligations.” Id. at *1. For example, he had ordered defendants to produce forensic images of all computing devices by a date certain after plaintiffs identified deficiencies in defendants’ responses to discovery demands. Id. at *2. After requesting an extension, defendants failed to produce full forensic images by the deadline, instead producing the “data visibly resident” on the devices. After Judge Engelmayer set a new deadline, defendants again failed to timely produce the forensic images. Id. at *3. As a result, Judge Engelmayer ordered defendants to pay $4,000 in sanctions to the court and $12,797.50 in attorney’s fees and costs to plaintiffs.

Plaintiffs then sought spoliation sanctions related to three other issues. First, plaintiffs alleged that defendants had installed and used “anti-forensic” or “cleaning” software to delete electronic files during the litigation. Id. at *3. At a hearing, Judge Engelmayer heard expert testimony that established that defendants had used two types of antiforensic software (“CleanMyMac” and “Advanced Mac Cleaner”) on three different computers. Id. at *4. Of the two types of software, Judge Engelmayer focused on CleanMyMac because it was the only software that required the user’s affirmative input before deleting files. The software was designed to help free up space on hard drives by identifying files that the user could delete, either by deleting or overwriting the file. Plaintiffs’ expert found that defendants had used the software to delete files after the lawsuit had been filed. Id. at *5. Defendants testified that they recalled using the software and conceded that it was possible they deleted files relevant to the litigation.

Second, plaintiffs alleged that defendants had failed to preserve a computer after plaintiffs found a picture of the computer sitting on the desk of one of the defendants. Defendants’ counsel testified that it was his understanding that the computer belonged to someone who had moved out of state and taken the computer with him. But counsel did not have any personal knowledge of the contents of the computer, as its contents were not reviewed or preserved before it was removed from the office.

Third, plaintiffs alleged that a defendant had deleted relevant text messages that were later recovered from his phone. Id. at *6. The defendant admitted that he had deleted text messages related to the subject matter of the lawsuit after the lawsuit had been filed.

On this record, Judge Engelmayer concluded that defendants had intentionally spoliated evidence, justifying the imposition of an adverse inference instruction and award of attorney’s fees under Rule 37. Id. at *11. As a party seeking an adverse inference, plaintiffs needed to establish that (1) the spoliated evidence should have been preserved and (2) the opposing party acted with the intent to deprive the moving party of the information. Id. at *7. Judge Engelmayer concluded that defendants had been on notice since at least the initiation of this lawsuit of the duty to preserve potentially relevant evidence (if not sooner). And there was “overwhelming evidence” that defendants repeatedly breached the duty to preserve evidence by using the cleaning software, failing to disclose the existence of a computer and deleting text messages. Id. at *8. Judge Engelmayer further concluded that with the exception of the antiforensic software that could delete files without the user’s knowledge or input, the spoliation was intentional. Id. *9-*10. In weighing the appropriate sanctions, Judge Engelmayer found that an adverse inference instruction and attorney’s fees relating to the motion were an appropriate spoliation sanction because no lesser sanction would adequately remedy plaintiffs’ injury. Id. at *11.