#CaseoftheWeekCase LaweDiscovery Rules

#CaseoftheWeek Episode 2: Control of 3rd Party Data under Rule 34 and Preserving Video Evidence

On this episode of ACEDS #CaseoftheWeek, Kelly Twigger reviews two decisions related to EEOC v. MVM, Inc., 2020 WL 6482193 (D. Md. 2020)—control of 3rd party Data under Rule 34 and preserving video evidence.

Full Episode Details

Hi and welcome to the ACEDS’ #CaseoftheWeek. I’m Kelly Twigger, CEO and founder of e-discovery assistant and principal at ESI Attorneys. ACEDS and eDiscovery Assistant launched this live stream to help educate lawyers and legal professionals on eDiscovery case law and to discuss the practical implications of decisions that we are seeing every day.

eDiscovery assistant maintains a database of eDiscovery decisions that are tagged by issues to allow us to get to answers quickly in discovery. And each week we pick a case that’s come out recently and talk about the practical implications of that with regard to what needs to be happening for your clients and for your practice. So let’s dive right in.

This week we’re talking about a case titled EEOC versus MVM Inc. There are actually two decisions that are relevant in this case here, the first of which is the site that you received when you looked at the link for this event, and that is the district court judge’s ruling from Judge Chuang.

But prior to that, there was also a magistrate judge ruling from Judge Sims. And we want to be able to talk a little bit about both of them. So oftentimes, as we know, discovery decisions are pushed down to the magistrate level, and that’s exactly what happened here in the EEOC case.

So let’s talk a little bit about the facts. This case involves the alleged sexual assault of a female MVM employee by her supervisor. And the cases, as we have talked about previously, don’t always give us all of the facts that we need to definitively create a story. But here, the facts suggest that that incident occurred in early to mid-February of 2016.

The facts also tell us that video evidence was available for at least 30 days after the incident. Following that, criminal charges were filed against the supervisor on March 2nd. So relatively shortly after the event. And that MVM was aware by February 25th that the victim was considering filing a claim. We also know some other dates. March 2nd, as I said, was the date the criminal charges were sought. We also know from the facts of the case that video evidence had been obtained for other events by MVM for times longer than 30 days. So even though retention of the video evidence is stated as only being 30 days, there was evidence that was put forth in both of these decisions that MVM was able to recover video evidence for times up to three years after an incident so the 30 day retention period was called into question. And that’s something we’ll talk about in the practical implications.

So what happened here?

Essentially, MVM did not identify that video evidence or that e-card reader evidence. So evidence where employees would have scanned their card into a card reader was available to them for discovery until December of 2016. And so with regard to the video evidence, they weren’t available, weren’t told until December of 2016. With regard to the card reader evidence, the facts of the case tell us that the EEOC was never informed of the availability of that information.

So plaintiff moved to for sanctions for failure to preserve evidence that would have been direct evidence supporting or contradicting MVM’s version of these events. EEOC argued that there was prejudice and that MVM acted with the intent to deprive as required under FRCP Rule 37(e) 1 and 2 and the sanctions that plaintiff requested were to preclude the introduction of evidence of any video footage and to preclude testimony from the defense related to the video footage or the card reader data, as well as to preclude the introduction of a memo prepared by MVM’s former general counsel. There’s not a lot of discussion in either of these decisions about the specifics related to what’s on the video footage, what was sought to be introduced by the defense as opposed to what the plaintiffs would have wanted to see.

And so this is this case is light on those kinds of facts and those are things you almost have to go back to the briefs or the pleadings to fill in those holes. They also the plaintiffs also asked to have the issue of intent to deprive be submitted to the jury, and they asked for a jury instruction on that intent to deprive. So, in effect, looking for an adverse inference instruction, although not so stated in the case. The defendant argued, MVM stated that the video and card reader evidence was one not would have already been erased in the ordinary course of business based on the date of the duty to preserve that would have attached, and that the video and card reader evidence were outside their custody or control because they were owned by the Social Security Administration, which is just referred to as SSA in the decisions. And so they argue that there was no legal duty to preserve until December of 2016, which would have been almost 10 months after the incident occurred when they received notice of the charge from the EEOC. They argued that they did not have a legal duty to preserve, to notify the SSA to preserve the information that there was no prejudice and there was no intent, no evidence of intent to deprive. So we talked a little bit about the facts. Let’s talk about Judge Sim’s ruling on the initial motion of the magistrate level and what Judge Sims found. And when you read this decision in both of the links to this decision and the district court decision should be on the event page here for a #CaseoftheWeek.

When you read the magistrate’s decision, you’re going to see that it’s really short. It doesn’t include a lot of facts. It doesn’t include a lot of explanation of what the court found. But what the court held was that the video and card reader evidence were not the property of MVM and that the duty to preserve evidence arose as of June 29th 2016 and not in December as the defense argued. The magistrate also held that MVM failed to notify the EEOC of the existence of videotape data until December 2016 and never notified them of the existence of the card reader data. Now the court found that prejudice definitely existed, but there was no intent to deprive demonstrated. And when you read the magistrate’s decision, you’ll see that the EEOC actually asked for the ability to present evidence on the intent to deprive so there was not intent to deprive demonstrated for purposes of rule 37. The court found that the evidence that the EEOC sought also likely had foundational evidentiary issues, which is an interesting statement from the magistrate, but also found that some sanctions were appropriate. And so the magistrate issued sanctions in the form of exclusion of any video at trial or in the alternative that if the defendant was allowed to produce the video as evidence that the permitted, the plaintiff be permitted to show evidence regarding the loss of video footage.

MVM appealed the sanctions—appeal not the right word–objected to the magistrate’s ruling under rule 72. And so the ruling came before the district court to review the magistrate’s ruling under a standard of clearly erroneous, which is what’s applied under rule 72. And that standard is really important because what that standard means is that the court has to find a definite and firm conviction that a mistake has been made by the magistrate judge in order to overturn the decision by the magistrate.

The reason for that is that you don’t want to essentially negate the benefit of having magistrates below district courts, which are intended to relieve the burden of the courts and provide additional resources for the courts. The court, the district court’s ruling judge Chuang’s, ruling, he looked first at whether or not the magistrate had applied the correct standard for determining control of the ESI and the duty to preserve that was triggered. MVM argued that both of those were determined incorrectly by the magistrate judge.

And as I mentioned earlier, that any of the evidence that we’re talking about here, the video evidence or the e-card reader evidence would have been destroyed in the ordinary course of business, subject to retention schedules by the SSA.

The district court looked at the test that the magistrate judge had applied, which is considered a disjunctive test, which holds that ‘documents are considered to be in a party’s control when that party has the right authority or practical ability to obtain the documents from a non-party to the action’. And this is what’s probably the most important part about this particular ruling.

It becomes nuance because it applies to video evidence here and e-reader evidence, but what’s really important is that when you’re looking at a third party that has data. So if as a manufacturer, I have facilities that maintain video evidence of what’s happening on the premises of my employees are coming to and from, or I have any data that is managed by a third party. Office365 email data is another good example. The question under rule 34 for custody or control is whether you have the right authority or practical ability to obtain the documents from that non-party and that issue has been litigated many times. This is not new information, but as it pertains to video, is noteworthy.

So in this particular instance, the analysis that the district court went through that we don’t see in the magistrate’s decision is important in establishing that control. So there were really four or five different factors that the court found established a relationship between MVM and SSA, which meant that MVM had the ability or to obtain the documents from SSA. And those factors were that MVM provided security services to the SSA and SSA official was actively involved with MVM in investigating the allegations of this issue.

The SSA gave MVM access to the relevant video evidence simply through oral requests. MVM arranged for the remaining excerpt of video to be preserved, presumably in December 2016 when they argued preservation should have attached. But that’s not articulated in the case. And as a result of all those facts, the District Court found that there was no basis to disturb the magistrate’s finding that MVM had the practical ability to preserve the evidence. So, what’s important to note there is that when you’re making these arguments, you need to define the facts of the relationship between the party that you want to have custody of control of the data and the party that owns the data because those facts are going to be really telling as to whether there’s a practical ability to obtain documents under rule 34.

So with the custody or control issue resolved, the court looked to whether or not the magistrate’s ruling on the duty to preserve date was appropriate or clearly erroneous, I should say. June 29, 2016 is the date when the EEOC sent the initial notice to MVM and that’s the date that the magistrate said that was the very latest when the duty to preserve could have attached. The magistrate also found that there was a more general duty to preserve by March 21st, and I’m not really sure where that day comes from because it’s a little wonky with the other dates that are in the in the decisions. And as you know, until you’re involved in the case, the specific dates become something that you may not always be aware of in these decisions. But because MVM was aware by February 25th that the victim was considering filing a claim, by March 2nd, the criminal charges were sought and subsequent to that, MVM fired both the supervisor and the victim. The victim then sought unemployment benefits. In looking at all of those things, the magistrate or the district court judge said that he actually felt like that given the June preservation date that the magistrate gave was very generous and that it was highly likely that the duty to preserve rose a lot earlier, whether that was in February or March. Either way, the court found that two things compelled the notion that the video evidence should have been preserved—one is that the preservation date would have been much earlier and shortly after the event and two, that the when the duty arose in March, that was barely over 30 days after the incident and the potential routine destruction of the evidence.

I think the most compelling factor, although it’s not set out as compellingly as I would have expected in this decision, is that the court reemphasized that MVM had successfully gone to SSA and gotten video evidence more than three years after the incident. So that was really the compelling factor that said, not only should you have gone to SSA and preserved this information, but you showed that the 30-day routine destruction doesn’t really hold water here. So what’s important from that perspective is that if you have a routine deletion of data, it needs to be happening. It needs to be audited, and you need to make sure that that is, in fact, happening or you will not be able to rely on that routine deletion of data under rule 37.

So with all of that in mind, the court held that the evidence should have been preserved as early as March 2016. There was a failure to preserve it. There was prejudice demonstrated and the sanctions that were set out by the magistrate judge were warranted.

So what are some of the additional practical takeaways from this, these decisions?

This is the second week in a row on our case of the week that we’ve talked about an employment case and employment cases tend to raise significant discovery issues, even though the value of those cases may not be as large as a sophisticated commercial case or other types of cases that an entity might see. And but what’s important about that is that there are different types of evidence that are often at issue in employment matters because they deal directly with personal interactions and personal interactions are different than business interactions. And the sources of information that are available to capture personal interactions are different. Instant messaging, which we talked about in last week’s case of the week, this week, video evidence. So this is what’s really crucial here is you need to understand, especially if your employment counsel, what are your potential sources of data, where do they live, how can I know and understand and get to them quickly to preserve them.

In this particular instance there may have been (it’s difficult to tell from the facts of the case but) there may have been a breakdown in communication of from within MVM of who was getting information about a notice, who was making a decision about when there was a duty to preserve and actively taking steps to preserve information. So looking at your policies and your practices of putting those policies in place, you’re essentially you’re steps for getting legal holds in place and preserving evidence are really key. A lot of times in employment disputes, we see a desire to hold on taking active steps until we know that a case is going to become a real claim, and that can hurt you in certain situations.

So what are we seeing about video evidence, duty to preserve and failure to preserve?

Just a few things to understand. And we talked about this standard earlier, but it’s really critical for you to take away that under rule 34 that documents are in a party’s control when that party has the right authority or practical ability to obtain those documents. So when you think about your third party relationships, think about whether you have that practical ability. And if you do, you’re going to want to set up policies and procedures to be able to obtain that information, put preservation in place under a legal hold.

We’ve seen a lot of case law this year and overall in the eDiscovery Assistant database on these issues. Our database contains (just for some, let you know, the volume of what we’re seeing on these issues) 266 cases in the database that deal with just custody or control or sanctions using our eDiscovery tagging. Forty-three of those cases are just since January 2020 (January 1, 2020). On the duty to preserve, we’ve seen 161 cases on the duty to preserve since January 1, 2020.  Failure to preserve video we’ve seen 263 total cases in our database and 33of those are since January 1st. So video evidence is becoming a very prominent form of eDiscovery that we need to be focused on and paying attention to.

Our total cases since January 1, 2020 this year are 2229 decisions. So we’re just going through the roof on eDiscovery case law. While many things have slowed down as a result of the pandemic, judges issuing decisions in the eDiscovery realm is not one of them.

So that’s our case for this week. I’m Kelly Twigger. Please join us next week on the case of the week and have a great Thanksgiving. Stay safe.

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#CaseoftheWeek will be available on the ACEDS YouTube, Facebook, Twitter, and LinkedIn company pages. You’ll also be able to read episode summaries and watch the recorded show right here on the eDiscovery Assistant blog every Thursday.

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