Here are my thoughts on key e-discovery cases decided in September, including a decision showing how a company can defensibly delete data that it no longer needs, the recent case “trend” of courts requiring the disclosure of the sources and search terms used to find discoverable ESI, and a couple of cases addressing the issue of “possession, custody and control,” one involving a parent-subsidiary relationship and the other involving the personal computers and electronic devices of former and current employees.


In re Pradaxa (Dabigatran Etexilate) Product Liability Litigation, MDL No. 2385 (S.D. Ill. Sept. 25, 2013). As discussed in more detail here, the trial court denied the plaintiffs’ motion for spoliation of the emails and documents held by the defendant’s former vice president of marketing because the court found that the defendant properly destroyed the emails and documents pursuant to its document retention policies.

In addition to providing an example of how a company can defensibly delete data, the court also analyzed its authority to impose sanctions for the pre-litigation destruction of evidence. According to the court, a federal court has the authority to impose sanctions for a discovery violation based on (1) its inherent authority and (2) Civil Rule 37. The court noted that some courts have questioned whether Rule 37 provides authority to impose sanctions for the spoliation of evidence before a court order concerning discovery has been entered or a document request has been served. The court further noted that “[t]he Seventh Circuit has not expressly addressed whether Rule 37 is an appropriate vehicle for sanctioning culpable pre-litigation destruction of evidence,” and whether the source of authority for sanctioning such conduct comes from the court’s inherent authority instead of Rule 37. The court did not resolve this issue and simply concluded “that it ha[d] the authority to impose sanctions for the pre-litigation destruction of evidence (if not under Rule 37 then under the court’s inherent authority or a combination of the two).”

The court’s analysis is interesting in light of the proposed amendment to Rule 37(e), which is designed to adopt a uniform set of guidelines for imposing sanctions for the failure to preserve discoverable ESI. The current version of the Committee Note states without any analysis that proposed Rule 37(e) “forecloses reliance on inherent authority or state law to impose litigation sanctions in the absence of the findings required under Rule 37(e)(1)(B).” It appears from the past meeting minutes of the Civil Rules Advisory Committee that the Committee believes that proposed Rule 37(e) encompasses all the circumstances in which it would be appropriate for a court to rely on its inherent authority to impose sanctions for the failure to preserve evidence and, therefore, proposed Rule 37(e) would become the sole source for a court’s authority to impose such sanctions.

E-discovery costs

Novick v. AXA Network, LLC, No. 07 Civ. 7767 (S.D.N.Y. Sept. 24, 2013). The defendants sought an order directing the plaintiff to reimburse $20,868.75 in outside vendor costs and $19,980 in legal fees that the defendants incurred when they produced certain ESI to the plaintiff pursuant to a court order. The defendants contended that they should be able to recover these costs pursuant to Civil Rule 26(c) because their search for ESI yielded very few responsive documents and was largely duplicative of discovery defendants previously produced. According to the defendants, it was unfair to require them “to continue funding unending discovery” when the amount in controversy was small. The court applied the cost-shifting standard articulated by Judge Scheindlin ten years ago in Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. Sep. 24, 2003). Applying this standard, the court denied the defendants’ request for cost-shifting because they failed to show that the ESI was kept in an inaccessible format. “For data that is kept in an accessible format, the usual rules of discovery apply: the responding party should pay the costs of producing responsive data. A court should consider cost-shifting only when electronic data is relatively inaccessible[.]”

Search terms/sources of ESI

American Home Assurance Co. v. Greater Omaha Packing Co. Inc., No. 11-CV-270 (D. Neb. Sept. 11, 2013). The plaintiff sought an order compelling the production of emails and other ESI that the defendant had allegedly withheld. The plaintiff could not identify a specific email or electronic record that the defendant refused to produce, but argued that the small number of emails produced (25) showed a lack of diligence in production. The defendant contended that it had turned over all the ESI that its searches produced and that it was continuing to supplement its production as it found additional information. The defendant also offered to search available sources using search terms provided by the plaintiff, but the plaintiff refused to supply any additional terms. The court remarked that it “cannot compel the production of information that does not exist,” but then ordered the defendant to disclose the ESI sources it had searched or intended to search and, for each source, the search terms used. According to the court, this information would provide the plaintiff “an adequate opportunity to contest discovery of ESI.”

Viteri-Butler v. University of California, Hastings College of Law, No. CV 12-02651 (N.D. Cal. Sept. 30, 2013). The plaintiff in an employment discrimination case argued that the defendant’s responses to her document requests were insufficient. Among other things, the plaintiff requested the defendant to “specify what information systems as to which it has placed a litigation hold and what information systems it has searched for documents responsive to Plaintiff’s Rule 34 requests, as required under the [Northern District of California]’s Guidelines for the Discovery of Electronically Stored Information.” The defendant responded that it fulfilled its discovery obligations and complied with the court’s Guidelines and Checklist for the Rule 26(f) Meet and Confer because it certified that “it ha[d] searched all locations where the information Plaintiff seeks in her requests for production may plausibly be located.” In light of the extensive detail set out in the Guidelines and Checklist, the court ordered the defendant to provide an amended certification that identified the location and types of information systems with potentially discoverable ESI (including date ranges of the ESI available on each system) and the search methods (including search terms) used to identify discoverable ESI.

These cases continue the “trend” of courts requiring parties to disclose the sources and search terms used to find discoverable ESI, as noted last month. Ralph Losey has more analysis about this trend and the American Home Assurance decision in his blog.

Possession, custody or control

Dugan v. Lloyds TSB Bank, PLC, No. 12-CV-02549 (N.D. Cal. Sept. 4, 2013). The defendant refused to produce ESI for custodians employed by its parent company even though it had previously identified those custodians as persons with responsive information. The defendant took the position that it was not obligated to produce ESI from these custodians because its parent company was a separate legal entity and the parent company’s ESI was “not necessarily” within the defendant’s possession, custody or control. The court stated that in the Ninth Circuit “control” is defined as “the legal right to obtain documents upon demand.” “A practical ability to obtain the requested documents from a related organization is not enough because the related organization could legally — and without breaching any contract — refuse to turn over such documents.” The court held that the plaintiffs failed to meet their burden of showing that the defendant had the “legal right to obtain documents from its parent on demand,” and therefore denied the plaintiffs’ motion to compel. The court reached its conclusion even though the parent company had provided documents and witnesses to support its subsidiary’s defense and the plaintiffs submitted evidence showing that the defendant and its parent shared the same internal legal group, the two had the exact same ten-member Board of Directors, and the parent “played a critical role in administering and profiting from the loans at issue in this lawsuit.”

Kicapoo Tribe of Indians of the Kickapoo Reservation in Kansas v. Nemaha Brown Watershed Joint District No. 7, No. 06-CV-2248 (D. Kan. Sept. 23, 2013). The plaintiff moved the court to order forensic mirror imaging of computers and other electronic devices personally owned by the defendant’s former and current members, employees, and staff. Magistrate Judge David J. Waxse found that the plaintiff had not shown circumstances sufficient to justify the forensic mirror imaging of these computers and devices. First, Magistrate Judge Waxse found that the defendant did not have “possession, custody or control” of the personally owned computers and devices of former and current members, employees and staff. The plaintiff failed to meet its burden of showing that the defendant had the legal right to obtain ESI from the personal computers and devices of these individuals “on demand.” The plaintiff also failed to show that any of the defendant’s current members, employees and staff used any of their personally owned computers or devices for the defendant’s business. Second, Magistrate Judge Waxse also expressed “significant concerns regarding the intrusiveness of the request and the privacy rights of the individuals to be affected.” Accordingly, he found that the plaintiff’s “broad, non-specific request to inspect” the computers did not outweigh the privacy concerns of the individuals affected.

Earlier this year, Magistrate Judge K. Gary Sebelius, also from the District of Kansas, similarly ruled that an employer did not have possession, custody or control of its employees’ cell phones. See Cotton v. Costco Wholesale Corp., Case No. 12-2731 (D. Kan. July 24, 2013). That decision is discussed here.