Friday, August 7, 2009

Finding Defendant "May Have" Caused the Deletion of "Possibly Relevant Emails," Court Orders Sanctions, Including Payment to Local Bar Association

K&L Gates wrote the following on its Electronic Discovery Law Blog [the original post can be found here]:

Finding Defendant "May Have" Caused the Deletion of "Possibly Relevant Emails," Court Orders Sanctions, Including Payment to Local Bar Association

Pinstripe, Inc. v. Manpower, Inc., 2009 WL 2252131 (N.D. Okla. July 29, 2009)

In this case, defendant Manpower, Inc. (“Manpower”) failed to distribute the litigation hold notice that was provided to it by counsel and failed to monitor compliance with oral instructions to some managers. As a result, “possibly relevant emails were destroyed.” Despite significant efforts, the deleted data could not be recovered from the system. Approximately 700 emails were recovered from their recipients, however, and the emails’ attachments were preserved on “another server.” Plaintiff sought sanctions against Manpower and its counsel. Specifically, plaintiff sought default judgment or an adverse inference instruction. The court denied plaintiff’s motion as to counsel, but agreed that some sanctions were warranted against Manpower. Accordingly, the court’s order allowed plaintiffs to re-open depositions to address the late production and to seek additional relief if the need arose and ordered Manpower to contribute $2500 to the local bar association to support a seminar on litigation hold orders and preservation of electronic data.

Plaintiff filed suit in October 2007. Four days later, Manpower’s attorneys forwarded a litigation hold which Manpower failed to issue. Plaintiff served its requests for discovery in February 2008. Later that summer, following its production of documents, Manpower (through counsel) certified the completeness of its response. In January 2009, however, upon plaintiff’s inquiry into Manpower’s preservation efforts, in-house counsel discovered that a litigation hold was never issued. Despite her immediate issuance of a hold, at least one employee deleted potentially relevant emails.

Thereafter, Manpower expended significant effort to retrieve the deleted emails from its system, including hiring an outside vendor at a cost of $30,000. More than 700 emails were eventually recovered from the emails’ recipients. Manpower also claimed that any attachments to the emails were preserved on a separate server. Nonetheless, plaintiffs sought discovery sanctions.

After establishing a party’s duty to identify and preserve relevant information upon reasonably anticipating litigation, a duty which requires that “all sources of potentially relevant information are identified and placed ‘on hold’” and that compliance is monitored, and thus “necessarily involves communication with all of the ‘key players’ in the litigation,” the court turned its discussion to the culpability of Manpower and its counsel for the loss of potentially relevant emails. The court denied plaintiff’s motion as to counsel upon finding that “[counsel] made reasonable inquiry into the completeness of Manpower’s document production and relied on the client’s representations in that regard” as is allowed under Fed. R. Civ. P. 26.

Regarding Manpower, the court concluded that the conduct was not intentional, but that some sanction was nonetheless warranted. Rejecting the extreme sanctions of default judgment and adverse inference, the court considered lesser alternatives. In its consideration, the court noted plaintiff’s failure to establish “that Manpower ha[d] not recovered the e-mails at issue or that any missing emails are relevant to [plaintiff’s] claims” and that the prejudice suffered by plaintiff consisted of preparing for depositions that were later rescheduled and taking some depositions without the benefit of belatedly produced documents.

Concluding its discussion, the court found that “Manpower’s conduct may have caused the destruction of relevant emails.” The court noted Manpower’s significant efforts to recover the deleted emails but determined it was “unclear” whether those efforts were “wholly successful.” Accordingly, the following sanctions were ordered:

(1) If [plaintiff] must re-open any deposition to address late produced evidence, it will be allowed to do so. Deposition costs will be borne by Manpower.

(2) If [plaintiff] wishes to depose Manpower's IT person or a representative of Forensicon, the forensic consultant Manpower hired in an effort to recover lost e-mail, it may do so at Manpower's expense. Any costs imposed do not include attorney fees. Each side will bear its own fees in connection with the depositions discussed above.

(3) If [plaintiff] learns of a specific, relevant e-mail that has not been recovered or otherwise produced, it may petition the Court for further relief.

(4) Manpower shall contribute the sum of $2,500 to the Tulsa County Bar Association to support a seminar program on litigation hold orders, and preservation of electronic data.

A full copy of the opinion is available here.


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