Finley v. Hartford Life & Accident Insurance Co., Case No. 06-6247 (N.D. Cal. February 22, 2008)

In this wrongful disability termination action, plaintiff sought sanctions for defendants’ tardiness in producing a portion of a video – the kitchen video – as part of defendant’s initial disclosures pursuant to Rule 26(a). Magistrate Judge Maria-Elena James rejected the portion of plaintiff’s motion based upon plaintiff’s document requests: “the court can find nowhere in the record after the filing of this lawsuit where the Plaintiff asked Hartford for the missing tape with specificity, or otherwise put the defendants on notice that the kitchen part of the video was missing.” But the combined action of delegating the search to an administrative assistant and her failure to follow company policy in her search for materials caused the court to reject defendants’ argument that a reasonable search was done:

When she failed to search the “old database” as Hartford's own policy required, the kitchen video was not discovered, even though it was not lost or misplaced. The Court finds it unreasonable for Hartford to rely on a system which contains so few checks and balances that the mere fact that an administrative assistant did not look for a file, in the filing cabinet where that file was normally kept, could undermine Hartford's entire initial disclosure apparatus. The file was where it was supposed to be. It was unreasonable for Hartford not to find it there at the point of its initial disclosures. Therefore the Court finds that Hartford violated Federal Rule of Civil Procedure 26(a).

Slip Opinion at 4. 

Plaintiff also sough sanctions against defense counsel for failure to perform a reasonable inquiry as required by Rule 26(g)(2). The court found that counsel “should have diligently supervised the methods Hartford used to gather material for discovery. Doing so may have avoided much of the controversy now before the Court. The Court further finds that Hartford did not make the requisite ‘reasonable inquiry’ required by Rule 26(g).” This failure, however, was mere negligence. Since they did not act in bad faith in certifying the discovery, and since plaintiff had not served a clear and concise request for the tape, the court declined to sanction counsel.

Plaintiff spent a considerable sum in depositions and on experts in reconstructing what happened before they received the tape. The court was careful to sanction defendants for only that amount which was directly related to the tardiness I turning the tape over.

There are a couple of interesting thoughts here. This Judge, like many others, seems willing to impose a duty to supervise the methods used by the clients in gathering material for discovery. As discovery of ESI gets more complicated, this duty may well become a major problem for counsel. The court in the Diabetes Centers case, discussed here, also refused to sanction counsel for negligence in meeting the duty to supervise the client in its search for documents. This is probably a good sign, but as we wrote then, one must wonder how long negligent supervision will continue to be overlooked by the courts.

Moreover, the courts words suggest that had plaintiff specifically asked for the tape in a document request, counsel may well have been sanctioned, so much for negligence being a defense. This raises the question whether there is a heightened duty to supervise in response to specific discovery requests.

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