Good morning and welcome to Episode 76 of our Case of the Week series, published in partnership with ACEDS. My name is Kelly Twigger. I am the CEO and founder of eDiscovery Assistant and a principal at ESI Attorneys. Thanks much for joining me today.
As you know, on our Case of the Week series, each week we choose a recent decision from our eDiscovery Assistant case law database and talk about the key issues raised in that decision for litigators, anyone involved in the process of discovery and litigation, and talk about the practical implications of that decision for you on your practice and for your clients.
You can read an article from Law.com written about this week’s case here written by my colleague Phil Favro of Innovative Driven.
All right let’s jump into this week’s decision. This week’s decision comes to us from the Southern District of New York. It’s a decision from the In re Keurig Green Mountain Single-Serve Coffee Antitrust Litigation. The decision was from April 11th of 2022 and is authored by United States Magistrate, Judge Susan J. Cave.
Judge Cave has 30 decisions in our database, and most of them are extremely thoughtful, including this one. I recommend that you spend some time with this decision because it covers a lot of issues on information governance, scope of preservation, understanding your client’s infrastructure, what counsel’s obligations are regarding its duties to preserve and to work with clients on preservation obligations, as well as sanctions under Rule 37(b) and Rule 37(e).
As always, in our eDiscovery System database, we tag each decision with issues from our proprietary issue structure. Issues for this week’s decision include:
- Competency of Counsel
- Legal Hold
- Sanctions
- Exclusion of Evidence
- Adverse Inference
- ESI protocol
- Spoliation
- Failure to Preserve
- Bad Faith
- Costs and Fees
Let’s jump into the facts on this decision.
Facts
We are before the Court here on competing motions for spoliation sanctions. Both parties, based on a schedule set by the Court, brought motions for spoliation sanctions. Because of the length of this decision and the analysis that goes into each party’s motion for sanctions, I decided to split this case into two different sections for Case of the Week. We’ve done that once previously with the DR Distributors case back in February of 2021, and it will really help us hone in on the analysis of those two parties’ individual motions.
Today we’re going to cover the plaintiff’s motion for sanctions as well as the Court’s recitation of the standards under each of the rules and what’s required for sanctions in the Second Circuit. Next week on Case of the Week, we will cover the defendant’s motion for sanctions in this decision.
Okay, you’re going to see right away from some of these facts that the issue here for purposes of plaintiff’s motion is one that we’ve raised on Case of the Week quite often, and that is that timing is everything and early planning and dealing with discovery from an early standpoint in the case is what’s going to be key here.
Let’s talk a little bit about the parties. Keurig, as you probably well know, manufacturers the Keurig coffee machines as well as the K-Cups that are used in those machines. The plaintiffs here are a collection of entities who also manufactured and sold the disposable cups that can be used in Keurig’s coffee makers, and they compete with Keurig’s K-Cups in that market.
The plaintiffs brought this class action against Keurig, alleging violations of the Sherman Act, the Clayton Act, and the Lanham Act, that by modifying Keurig’s 2.0 model of its machine and designing new cups which changed the K-Cup design, they essentially worked to eliminate the competition that plaintiffs brought to the market. That’s an underlying basis of where we are factually in the case.
Let’s talk a little bit about the timeline of the case, which, as we know, on Case of the Week is always one of the key factors in determining what issues are and our key takeaways.
In February of 2014, TreeHouse, who was one of the plaintiffs, files its initial complaint.
At a status conference, a couple of months later, in June of 2014, the District Court judge states that, “He hoped that all parties, the plaintiffs and defendants, have done what they need to do vis-a-vis their clients on document preservation, and I encourage the parties to meet and confer to submit a proposed protocol for electronically stored information.”
A month later, on July 1st, 2014, District Court Judge Broderick adopted the party’s joint ESI order. As part of that joint ESI order, the parties agreed to:
Take reasonable steps in good faith to prevent the loss, destruction, alteration, overriding, deletion, shredding, incineration, or theft of any document or data the party knows, or reasonably should know falls within the scope of Federal Rules of Civil Procedure 26(b)(1).
That’s the language that the parties agreed to in their ESI order in 2014.
Now, as of that date in 2014, both Plaintiff TreeHouse and Defendant Keurig represented that they had “Implemented a data preservation plan, issued preservation memoranda to relevant employees, and confirmed with IT personnel that auto deletions are suspended, and that measures have been implemented to prevent the manual deletion of email by individual custodians.”
Key to this analysis is the fact that the parties also agreed to ask each of their document custodians whether he or she maintains potentially responsive documents or data in any of the electronic or hard copy sources that were listed in the ESI order, whether those documents were at the custodian’s office, home, or online.
If a party concluded that a source of information listed in the ESI order was inaccessible, or that collection from or search of any of those sources would be unduly burdensome, the parties agreed to meet and confer to attempt to resolve those issues. All that information is included in the ESI order or was made as stipulations to the Court in July of 2014.
July 23rd of 2014, just three weeks later, Judge Broderick granted limited discovery on eight topics relating to the Keurig 2.0 Brewer, including user manuals, design specifications, marketing materials, and the lockout feature, but otherwise staying discovery pending Keurig’s motion to dismiss.
Now, despite that stay by the Court, the plaintiffs went ahead and issued several third-party deposition notices and subpoenas. The Court stayed responses to those third-party notices pending a ruling on the motion to dismiss. On that same date in July, the plaintiffs filed a consolidated amended complaint.
Now, let’s fast forward to two years later. On August 31, 2016, the Plaintiff TreeHouse served its first set of requests for production on Keurig. On September 27th of 2016, just about a month later, Judge Broderick ordered the parties to fulfill their custodian obligations and their search term obligations under the ESI Order from 2014 within 14 and 30 days of the ruling on the motion to dismiss.
Essentially, as we’ve seen in other cases, Judge Broderick gives the parties a heads up, “Hey, I’m going to rule on this motion to dismiss, and when I do, you need to be prepared to start producing information within 14 days on your custodian obligations and 30 days on your search term obligations.”
Fast forward another year, November 29th, 2017. The Judge largely denies Keurig’s motion to dismiss and ordered that discovery should commence with all the deadlines under the September 2016 order beginning to run on December 1, 2017. Those 15 and 30-day obligations to agree to custodians and search terms now start effective December 1, 2017.
Now, under that order from September 2016, the parties were to have identified their custodians and search terms by the end of 2017. Of the original 29 agreed-upon custodians for Keurig that the parties identified in late 2017 and in early 2018, 23 of those were former employees, and of an additional 25 agreed on custodians identified during fact discovery, 21 of them were former employees.
You’ve got a lot of former employees from Keurig. We’re going to talk a little bit about the other changes that happened at Keurig from the time that the complaint was filed in 2014 up until discovery started running really in 2018.
The time period for documents to be collected and produced was January 1, 2009, through December 31, 2017. We’re talking about an eight-year period. There was one exception to that time period, and that was an order requiring Keurig to produce documents in a related Sturm Litigation that did not have a time period on it.
The Court found that the deadline for substantial production of the documents was April 30, 2018, which was only four months after the Court said GO on discovery in December of 2017. That’s not very much time to deal with what will be an enormous amount of discovery.
Now, one question that I have here is this “completion of substantial production of documents.” I’ve seen that come up a few times. We’ve had it in cases in which we’ve been discovery counsel. It’s very vague. What does it mean? What does substantial production of documents mean? I would encourage, if you get engaged with that language, to understand fully what that means, so you’ve got an idea of what your obligations actually are at a substantial completion date.
Now, subsequent to that April 30, 2018 date, the Court then extended the date for TreeHouse, JVR and Keurig to substantially complete their document production for the initial agreed upon custodians, as well as 12 additional Keurig custodians, five TreeHouse custodians, and one additional JVR custodian. That date was then extended to January 4th of 2019, and January 11th was now the date for those third-party subpoenas and depositions that had been issued previously to be responded to.
Discovery finally closed in the matter on May 20, 2020. What we’re looking at before the Court now are motions that were filed on April 9th of 2021 on a set schedule by the Court, and both motions brought by plaintiffs and defendant allege spoliation of evidence. As I mentioned, we’re just going to start with the plaintiffs’ motion today, and we’ll cover the defendant’s motion in part two of this Case of the Week series.
What does the plaintiff’s motion allege? Essentially, they’ve got six different things that they claim were spoliation by Keurig.
- A failure to conduct proper and timely custodian interviews.
- A loss of hard drives for nine different custodians.
- An inability to access hard drives for 15 custodians.
- A destruction of hard copy notes.
- A failure to collect emails from its litigation hold repository.
- A delayed production of correct transactional data for experts use.
Essentially, on that last point, the plaintiffs claimed that they had done all their analysis and late productions by Keurig caused them to have to go and incur additional expenses to reconduct that transactional analysis. As remedies, the plaintiffs seek to exclude evidence on certain issues, as well as asking for an adverse instruction and costs and fees.
Just for purposes of context, Keurig also brought a motion here that we’re going to cover in our second segment, alleging essentially also a failure to preserve and a failure to produce documents and asking for exclusion of evidence. Based on the fact that we have competing motions here, the Court asked the parties really to stipulate to a very basic timeline about the preservation notices that laid out the key events on the motions.
The parties, over a several month period of arguing about it, filed those stipulations with the Court with apparently a fair amount of argument in them, and the Court held nearly 10 hours of hearings on these motions. A lot of time and effort by the Court in here. It is obvious from the decision that’s authored here as to the level of detail that the Court considers for each and every custodian as far as data being lost, as far as prejudice and intent are considered for purposes of sanctions under Rule 37(b) and Rule 37(e).
During the time period between when the first complaint was filed in 2014 and when discovery really started in 2018, Keurig experienced what all companies experience, which is an enormous turnover in personnel. Both from a perspective of business personnel, custodians who would have actually had and maintained relevant data, or data that needed to be preserved, I should say, as well as folks in the IT department.
As a result, the facts in the case, well delineated by the Court, lay out that at one stage Keurig used multiple different kinds of encryption software, the maintenance of which was not kept up by IT, and as a result, encryption passwords to be able to unlock encrypted drives were lost and there was not the transfer of information from employees that left IT to new employees that came on. That meant that was unable to unlock those encrypted drives. That’s one issue.
A second issue was the move from on-premise email to a Teams based email approach using OneDrive, where email was stored in one central location and users were starting to use shared drive locations as opposed to local hard drives. Those changes in the IT infrastructure at Keurig made discovery of older data that went back to 2009 very, very difficult.
Analysis
What’s the analysis by the Court on the plaintiff’s motion for sanctions? Well, the Court really begins by quoting some key language from Judge Scheindlin’s decision in Pension Committee all the way back in 2012. What the Court is really looking at here is we’ve got a huge scope of information over a nine-year period of time, enormous volume of custodians that are implicated on both sides for the plaintiffs and the defendants.
The Court thinks that it’s really important to put context around the party’s preservation obligations. It quotes this language from Judge Scheindlin:
In an era where vast amounts of electronic information are available for review, discovery in certain cases has become increasingly complex and expensive. Courts cannot and do not expect that any party can meet a standard of perfection.
Nonetheless, the courts have a right to expect that litigants and counsel will take the necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records are collected, reviewed, and produced to the opposing party.
By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records, paper or electronic, and to search in the right places for those records, will inevitably result in the spoliation of evidence.
That’s key language from Judge Scheindlin and it goes all the way back to 2012.
Plaintiffs’ motion here seeks sanctions under Rule 37(b) and Rule 37(e) and the Court then goes through what we’ve done on Case of the Week several times, the analysis for what parties must show for sanctions under both those sections.
Rule 37(b), of course, permits the Court to issue an order directing that the matter is embracing the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims, or prohibiting the disobedient party from supporting or opposing designated claims or defenses or from introducing matters in evidence.
Now, the Court notes that to allow for an adverse instruction under Rule 37(b) that the plaintiffs have to establish:
- that Keurig had an obligation to preserve evidence at the time it was destroyed;
- that records were destroyed with a culpable of state of mind which requires that the party acted in bad faith through gross or ordinary negligence and
- that the evidence was relevant.
That’s what we need to be able to get some sanctions under Rule 37(b).
Under Rule 37(e) the Court cites to the 2015 Amendment to the Federal Rules of Civil Procedure and specifically addresses the spoliation under Section(e)(1). Which states that “If ESI should have been preserved in the anticipation or conduct of litigation and is lost because the party failed to take reasonable steps to preserve it and it cannot be restored or replaced through additional discovery, the Court may on a finding of prejudice order measures no greater than necessary to cure the prejudice.”
Regarding Section(e)(2), the Court also finds that we have to have an intent to deprive and if that intent is shown, then the Court can presume that the lost information was unfavorable to the party or instruct the jury that it may or must presume the information wasn’t favorable to the party or dismissed the action or enter a default judgment.
Again, to get to those harsher sanctions, we’ve got to have that intent to deprive. We’ve discussed intent multiple times on Case of the Week and the high bar to be able to get there.
Let’s dive into the analysis under Rule 37, and this Court starts with looking at the duty to preserve which is applicable to both Rule 37(b), as well as Rule 37(e). The Court notes that the duty of preserve attaches when a party should have known that the evidence may have been relevant to future litigation.
When that party anticipates litigation, it must suspend its routine document destruction policy and put a hold in place to ensure that preservation. Now, what’s key here is that the Court notes that reasonable steps to preserve includes an obligation by counsel to, “become fully familiar with her client’s document retention policies as well as the client’s data architecture.”
What the Court is saying here is that counsel’s obligations extend much further than simply advising her clients as to what documents might be necessary in a litigation. That’s important because we see a lot of instances where counsel simply ensure that a litigation hold notice is sent and then rely on their clients to take those preservation steps. What the Court saying here is that counsel has that obligation.
The Court also notes that that obligation requires the counsel speak with information technology personnel who can explain the function of IT as it works in practice and take any affirmative steps to monitor compliance so that all the sources of discoverable information are identified and searched. That’s our standard for duty to preserve.
Prejudice, we’ve covered several times here. The Court notes here that relevance is not necessarily proof of prejudice, that the judges have the best course of discretion to determine how best to assess prejudice in particular cases; that it is sufficient if the existing evidence plausibly suggests that the spoliated ESI could support the moving party’s case. Of course, if evidence can be gained from another source, there is no prejudice.
Next, with intent to deprive under Rule 37(e)(2) according to the Court, “Rule 37(e)(2) contemplates not only the intent to perform an act that destroys ESI, but rather the intent to actually deprive another party of evidence,” and notes that “if an intent to deprive is found, no separate showing of prejudice is required because the finding of intent to deprive supports an inference that the opposing party was prejudiced by the loss of information.”
Now, there’s a very interesting quote here from the Court which cites two district court decisions, and this goes with the analysis that I raise regularly on the Case of the Week as to this high bar that we have for intent to deprive under Rule 37(e).
The quote from the Court says: “an intent to deprive can be found either from a conscious act of destruction or a conscious dereliction of a known duty to preserve electronic data.” (emphasis added) Now, that’s an interesting quote here to me because I’m reading the language, I’m seeing cases cited for it but I’m not seeing that quote really put into practice by the courts.
Instead, courts are looking only at affirmative actions or conscious acts of destruction as meeting that intent bar; I’m not seeing that in practice this notion that there can be a conscious dereliction of a known duty to preserve electronic data as meeting that intent standard. Clearly if the language “conscious dereliction of duty” was a part of the rule, we would be seeing a greater number of intent based sanctions rulings going in favor of the moving party.
The Court then goes through the factors that are required by the Second Circuit to determine the intent to deprive, and we’re going to review those more in the context of the plaintiff’s motion.
We talked a little bit about the stipulations of facts that were put forth by both of the parties and the fact that the Court was really frustrated with them both. Well, one of the things that the Court looks at here is that plaintiffs’ submissions on its motion were sparse compared to its submissions on the stipulations. Plaintiff filed 400 additional pages attached to its stipulations that were not included with its original motion. The Court says basically that’s improper, and we’re not going to consider them.
One of our key takeaways here is to make sure that when you’re moving for sanctions, you’re putting all the information that you need in order to support that motion for sanctions, including the timeline on the duty to preserve in the motion for sanctions and its supporting material.
Now let’s look at the analysis of Rule 37(b) and Rule 37(e) in plaintiff’s motion. The Court finds specifically that Keurig’s duty to preserve arose on February 14, 2014, when it first received TreeHouse’s complaint. Next, the plaintiffs argue that Keurig’s preservation and collection efforts weren’t reasonable, ultimately, because the data from 23 custodians was lost or irretrievable. As a basis for that argument, plainiff argues that Keurig lost hard drives of at least nine custodians, was unable to decrypt data from nine custodians, could not image the computers of six custodians due to physical damage and then failed to produce hard copy documents for multiple custodians.
The Court looked really to the question of whether Keurig fulfilled its duty to take affirmative steps to prevent spoliation and examine that efforts regarding the litigation hold and the custodian interviews that Keurig sent out and conducted the hard drives and the hard copy documents.
All of this is neatly broken out in the Court’s analysis and again, I’m going to encourage you to read this decision because it’s really going to instruct you on what steps you need to take for purposes of working with your clients on preservation.
When parties have complexities like legacy data that’s much older than their current systems, there’s going to be effort that’s required to consider what preservation can be taken, what issues need to be raised with opposing counsel right out of the gate as far as preservation problems go or accessibility to data. None of that happened here based on the facts in the decsion.
Let’s talk a little bit about the litigation hold notices. Keurig sent litigation hold notices to 700 employees. However, the Court noted that of the 54 custodians that Keurig agreed to as named custodians, that it did not timely interview 11 of those 54, which was about 20% and it failed to send a litigation hold to six of those 54 agreed upon custodians, which was 11%.
The Court noted that Keurig did not interview seven of the agreed upon custodians until after the January 4th, 2019 deadline for substantial completion. The Court also notes the fact that some of the custodians were no longer employees but that did not mitigate Keurig’s preservation obligations.
Keurig put itself in a bind here by simply saying, these are former employee, we don’t have custody of control of any data that is in their possession. The Court said, hey, you got to have more of a sense of preservation than that. You’ve got to at least go to these former employees and ask them what they have. To the extent they failed to ask some of those former employees, the Court held that Keurig failed to meet its preservation obligations.
In addition to that, Keurig’s failure to distribute litigation holds to those six custodians and to timely interview those 11 custodians constituted a failure to comply with the ESI order that the parties agreed to, and that constituted an order under Rule 37(b)(2)(a). The Court noted that those failures also were a failure to take reasonable steps to preserve ESI under Rule 37(e).
Out of all the efforts that Keurig took, and we’re going to detail more of what they did later, just the failure to interview agreed upon custodians and to make sure the data was preserved for those custodians was enough to breach their duty to preserve.
The Court next looked at the issue of potential spoliation of hard drives of 23 custodians through whether they were lost, there was an inability to decrypt them, or they were damaged. Keurig collected in this case over 90 hard drives and laptops. That’s a lot of hard drives and laptops folks.
Of that 90, nine of those devices were inaccessible due to lost or inoperable encryption keys. Six of them couldn’t be accessed due to damage to the drives. As a remedy for that information, which Keurig did not offer to plaintiffs until far into discovery in 2019, Keurig offered to provide a 30(b)(6) witness, produce a chain of custody for that information but also let the plaintiff’s vendor try and access those drives.
The plaintiffs took the drives, and got a vendor, but the vendor was unable to be able to get any more information off the drives that were damaged or encrypted.
Keurig was also unable to locate nine hard drives for custodians who received legal holds but left before the discovery commenced in early 2018. That’s one of those situations where had steps been taken in 2014 when those custodians were named, but still with the company, that could have been avoided in this situation.
The Court found that altogether, 16 hard drives were inaccessible. Nine were lost altogether for 23 agreed upon custodians whose files should have been preserved and searched under the ESI order.
The Court found that even if it infers that that information became inaccessible due to the passage of time or in the ordinary course of Keurig’s business, their failure to preserve the ESI was at least a negligent violation of the ESI order and under Rule 37(b)(2)(a) and a failure to take reasonable steps under Rule 37(e).
The Court also found that Keurig failed to take reasonable steps to preserve relevant hard copy documents for one custodian. The Court noted that although the custodian received a legal hold, he did not recall receiving it, and counsel had not contacted him until the summer of 2019 to ask for documents.
Focus on that for a minute. He received a legal hold, allegedly in 2014, but nobody reached out to him until 2019. That’s the gap that you must bridge from a practical perspective. The Court found that the failure to take reasonable steps to confirm that the custodian had received and complied with that hold allowed those documents to be lost and therefore was another breach of the duty to preserve.
Next, the Court looks at prejudice, which is required under 37(b)(2), as well as 37(e). In terms of determining prejudice, the Court looks at the whole of Keurig’s efforts and really impressively documents all the facts surrounding Keurig’s efforts, which I assume were part of the response to the stipulations and motion papers to which that Keurig responded.
The Court finds that in the eight-year multi-district litigation consolidating over 30 different cases, Keurig has issued litigation hold notices to 700 custodians, collected documents from 54 agreed upon custodians as well as non-custodial sources agreed to by the parties, produced 3.8 million documents equating to 11 million pages, preserved and collected 99 hard drives of which 93 were successfully imaged and over 70 were successfully decrypted and produced 7 million pages of documents from prior litigations.
In addition to that, the plaintiffs deposed 23 of the 30 custodians whose information Keurig allegedly spoliated. The plaintiffs also served dozens of non-party subpoenas to former employees and the customers and suppliers who had issue in the litigation. Plaintiffs also participated in dozens of meet and confers with Keurig, as well as 17 discovery conferences with the judge and several others with an additional magistrate judge in this district.
That’s a lot of effort on Keurig’s part to be able to preserve information. As a result, because there are 23 different custodians that the plaintiffs claim the productions were deficient for, the Court goes through each of the 23 custodians and does an analysis of documents that were produced for that custodian, sources that were searched for that custodian, and the role of that custodian, as well as the time that that custodian was involved to determine prejudice.
As a result of that analysis, the Court finds that the plaintiffs were prejudiced by Keurig’s failure to preserve ESI for five custodians and that plaintiffs did incur costs of undertaking additional measures to recover discoverable information from those hard drives. For purposes of prejudice, that prong is met as to five of the custodians out of the 23.
The Court next moves to an intense determination under Rule 37(e) and this is an analysis that we’ve done multiple times on Case of the Week. I don’t think we’re going to see a lot of differences here despite that quote that I mentioned to you earlier where if you’ve got a conscious dereliction of duty regarding your duty to preserve.
Here, essentially the Court finds, as is consistent with the facts, that there was no intentional spoliation by Keurig, and that the plaintiffs here are seeking to prove intent through circumstantial evidence of counsel failing to conduct interviews, letting access to the encryption software lapse, failing to maintain a hard drive ticketing system that would allow hard drives for these individuals to be tracked, and other circumstantial evidence. The Court looks at each of those elements but essentially says that none of them rise the level of intent that is required. The failure to conduct interviews of custodians prior to them leaving the company was negligent, but that’s not sufficient for intent.
The Court also found that Keurig did not act for the specific purpose of gaining an advantage in the litigation, which is really the purpose of finding that intent under Rule 37(e).
As a result of finding prejudice but no intent, the Court then looks at what the available remedies are for the breach here. The Court notes that it can consider the sanctions of evidence preclusion and adverse inference under 37(b)(2)(a), because we’ve got the prejudice finding.
The Court grants the plaintiff fees and costs based on Keurig’s failure to acknowledge the issues from the drives and the lack of production, and it ordered the parties to meet and confer on what a sufficient basis for those fees and costs would be.
The Court also allowed the plaintiff to present evidence regarding the hard copy documents that were not preserved, as well as the gaps that were left by the failure to preserve hard drives for three custodians.
However, the Court does not find that an adverse inference is appropriate at all here. Essentially what we have is evidence preclusion on specific issues related to individual custodians as well as costs and fees that are awarded, but no substantial sanctions against Keurig.
Now, as I mentioned, we’ll take up Keurig’s motion for sanctions in part two on our Case of the Week next week.
What are our takeaways from the judge’s ruling here essentially granting the motion for sanctions for plaintiffs?
Takeaways
Preservation language in your ESI protocol or order needs to be carefully considered. Courts are holding parties accountable for the language in those ESI orders and in fact, the ESI order here and the failure to preserve information by Keurig was a basis for sanctions under 37(b).
Because there was no intent to preserve or no intent to destroy, had those preservation obligations either been met or had there been no language in the ESI order, there would be no sanctions here against Keurig, because that lack of intent under Rule 37(e), which is the standard on duty to preserve.
Okay, next takeaway. It is crucial that when a case is filed but you’re sitting on a current motion to dismiss, that you have a process in place to identify and collect data that may be responsive.
It is always going to be a balancing act as to whether to spend the money to engage early in the matter, but as this case shows, the process to recreate all the history of what transpired here, to hire experts to try to decrypt drives and to argue these motions is likely much more expensive than the initial data collection may have been.
What I’m advocating here is that you sit down, you have a legitimate discussion. We had 54 agreed-upon custodians that were identified not until 2017, but ostensibly that work could have been done in 2014.
You could have taken a very targeted approach to what data needed to be preserved and collected and we’ve seen in many, many cases that we have encrypted hard drives, we have hard drives that fail as a result of sitting around, that merely keeping hard drives with data stored on them on a shelf is not going to be a sufficient basis for preservation. You’ve got to take some active steps to make sure that that data is going to be available when you are preserving it.
Now, it’s very difficult and expensive to do all the discovery in this large matter, but technology here really could have been a huge benefit. We are talking about this going back to 2014, so it’s a substantially different landscape in terms of technology than what we have today in 2022, but even as far back as 2018, 2019, when the parties were working on discovery here, there could have been a lot done to use technology to both identify search terms and really narrow what kinds of data needed to be produced, as well as be able to find what else might have been available in terms of finding alternative sources for data that was lost.
Leverage your technology. As we’ve talked about, and we’re covering both in UF events and at AEDI at Georgetown this fall, and I’m sure will be covered in other eDiscovery Conferences. The cost of technology has dropped considerably and the ability to use technology-assisted review is great on small cases and will save you a lot of money.
Next takeaway is that this particular case was made very difficult by the age of the data being collected. This time in 2008, 2009 was still at a time where traditionally, the IT departments allowed custodians to maintain data on their personal hard drives as opposed to policies requiring information to be maintained on shared drives or even locking down laptops as happens now, more commonly now in IT departments, not across the board.
As a result, it was difficult to facilitate collection and losses here were due to how data was being stored at the time, as well as the encryption policy. A lot more of that has advanced, not quite 10 years since this complaint was filed, and you need to understand that when you’re looking at historical data, that there are going to be different applications applied to it, and it’s going to take a lot more time and effort to wade through that. Don’t wait until the last minute.
Okay. Next takeaway, and this is an important one, the duty of counsel is well articulated by the Court here, and it extends beyond just sending the legal notices and hoping that they are followed. We see that a lot, and the Court notes here, the counsel have an affirmative obligation not only to send out those notices, but to follow up with the custodians, make sure they understand their obligations, identify the locations of data to be collected, talk with IT, understand the client’s systems, and make reasonable decisions regarding preservation and collection early.
Finally, last takeaway, you need to include all facts on a motion for sanctions or a motion supporting a duty to preserve. If you don’t include your affidavit laying out all the steps taken to preserve information, you are risking those facts not being considered by the court.
Okay, that’s our Case of the Week for this week. Thank you so much for joining me. We’ll be back again next week with another decision on part two of this particular case.
If you are interested in doing a free trial of our case law and resource database, sign up for a free trial, or you can reach out to our team at support@ediscoveryassistant.com, and we can get you set up with a demo for your organization or team.
All right, thank you so much. Stay safe and healthy out there, and I’ll see you next week.
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