Now is a great time to look back on 2018's most influential eDiscovery cases.  Part two of this four-part series covers cases pertaining to preservation, spoliation, and sanctions.

From emails to text messages, parties have a duty to preserve all relevant information. The new Rule 37(e) was put in place to allow the courts to take a more unified approach to imposing sanctions when a party fails to preserve evidence or destroys it (even if unintentional). However, judges still need to use their power outside of the rule to reach the appropriate sanction. 

In Klipsch v. EPRO, 880 F.3d 620 (2d Cir. 2018), the headphone manufacturer brought an action against several defendants alleging they were selling counterfeit products. EPRO e-Commerce Ltd was alleged to have engaged in persistent discovery misconduct. The district court granted the plaintiff’s motion for discovery sanctions to compensate Klipsch for corrective discovery efforts and also granted a corresponding "asset restraint" of $2.7MM, AND $2.3MM bond to preserve the plaintiff’s ability to recover damages and fees at case end. EPRO appealed to the Second Circuit, arguing that its inability to provide access to certain email and messaging accounts should not have been construed as evidence of willful spoliation because "those accounts were primarily for private use." The circuit court upheld that "private" messaging addresses were known to be used for business purposes, and should have been made available. The court emphasized that discovery sanctions should be commensurate with the costs unnecessarily created by the sanctionable behavior, not the total value of the case—an important determination on what discovery sanctions are in light of the new federal rules.

The Federal Rules of Civil Procedure also provides for sanctions based on litigation misconduct as seen in Lawrence v. City of New York, No. 15-CV-8947, 2018 WL 3611963 (S.D.N.Y. July 27, 2018). Lawrence alleged NYPD officers entered her home without a warrant, pushed her to the floor, damaged her property, and stole more than $1,000. Two years later Lawrence provided photos of her apartment after the alleged incident. Her counsel produced them to the City of New York, claiming he was "unfamiliar" with metadata and ESI and "did not doubt that the photos were taken contemporaneously" with the incident. The City of New York learned that 67 of 70 photos were taken two years after the incident. Counsel moved to withdraw as Lawrence’s attorney.

This case demonstrates how the courts “possess certain inherent powers, not conferred by rule or statute ... to fashion an appropriate sanction for conduct which abuses the judicial process.” The court was somewhat lenient on Lawrence’s counsel, noting that his deficiencies did not meet the standard of Rule 11, or Rules 26 or 37. And while being sympathetic to the plaintiff’s claim of mental illness, her case was dismissed, rather than imposing harsher sanctions. Despite what seems like massive errors in legal counsel and eDiscovery sanctions, the court took the position that counsel met some minimum requirements of competency. 

While discovery sanctions can sometimes affect the outcome of a case, Waymo vs. Uber, No. C 17-00939, 2018 WL 646701 (N.D. Cal. Jan. 30, 2018), shows that they do not guarantee triumph for a party prevailing in motion practice. Anthony Levandowski was accused by Waymo of stealing trade secrets when he left to start his own company, which was later acquired by Uber. The court doled out discovery sanctions against Uber, but they were limited to permissive adverse inference instructions and other curative measures. Waymo did not obtain a mandatory adverse inference or other dispositive sanctions against Uber. The Judge clearly stated that parties must still properly marshal their evidence through discovery if they are to obtain a favorable litigation outcome.

Stay tuned for the next topic – search and retrieval.