By Cynthia Courtney, Esq., VP, Discovery Engineering
The question posed by this blog post is why parties continue to employ sloppy or nonexistent preservation and collection processes in litigation discovery. In Carrillo, et al. v. Schneider Logistics, Inc., No. CV 11-8557-CAS (C.D.CA. 10/5/12), U.S. Magistrate Judge David Bristow imposed multiple sanctions on a party that had repeatedly failed to preserve, identify, collect and produce responsive electronically stored information (ESI) in a wage and hour class action case brought against owners and operators of the warehouses where plaintiffs worked. This is a textbook case of what not to do.
The defendant ran the warehouses for the benefit of Wal-Mart, a customer. During discovery, plaintiffs became concerned at the lack of Wal-Mart-related documents in the production. There followed a classic sequence in which defendant said they had performed diligent searches, plaintiffs then raised concerns, and defendant thereafter “found” additional documents. To make matters worse, defendant claimed that they had no documents that responded to a particular request, but co-parties produced documents that defendant had created and should have produced.
Fed up, plaintiffs filed a motion to compel.
The court ordered the defendant to produce a custodian of records and corporate representative regarding its document retention policies, but the deponents were unable to answer many basic questions about those practices.
Another employee testified that she continued to delete e-mails up until the date of her deposition and had never been instructed to cease deleting e-mails. Defendant had also failed to suspend the company’s auto-delete function.
Defendant’s collection efforts were haphazard at best and its IT department had not been involved in the collections. And, defendant failed to produce requested surveillance tapes maintained by a third party, even though it had previously requested the tapes and had them in its possession.
The list goes on and on.
Acknowledging that it had no confidence in defendant’s continued assertions that it had produced everything it had, followed by promises to conduct further searches and the resulting production of additional documents, the court ordered the parties to agree upon an e-discovery vendor to identify and collect ESI directly from the defendant’s IT environment that would be responsive to plaintiff’s document requests. The court would allow the defendant to review the collected ESI for privilege, but not withhold any documents on the grounds of relevance. The vendor would also be tasked with undertaking a forensic examination to determine whether any relevant information had been deleted. The defendant was required to pay the costs and attorneys’ fees associated with the bringing of the motion to compel, and was also required to pay all of the vendor costs.
The key question is why does this continue to happen? Had this comedy of errors occurred seven years ago, or five years ago, we might conclude that the word had just not gotten out yet, but given the state of the law and the progress of technology in 2012, it strains credulity that a key custodian continues to delete e-mails up until the time of her deposition, and that a litigant insists that it has produced all responsive documents when it has not asked its IT department to perform searches across the enterprise.
Although the court referred to Fed. R. Civ. P. 26(g)(3), which requires that the court impose an appropriate sanction on the signer of discovery responses, the party on whose behalf the signer was acting, or both, there is at this point no requirement that counsel will be required to pay a part of the costs in this case. On October 16, 2012, plaintiffs were required to submit their statement regarding costs and fees. They claimed $197,363.19 in attorneys’ fees and expenses. A motion for reconsideration has been filed and a hearing set for November 29, 2012. That submission was due last week. It will be interesting to see the court’s order, the amount ordered for payment, and the allocation, if any, to counsel.
Tags: defendant, discovery phase, duty to preserve, e-discovery, ediscovery, electronic discovery, Information Technology, IT, litigation, litigation hold, plaintiff, preservation, preservation and collection, quality control, record retention, reduce risk, review tools, sanction