2017 eDiscovery Case Law Review

by Epiq


Electronic discovery cases that made headlines in 2017 featured well-known names such as Taylor Swift and Lynyrd Skynyrd, and reached all the way to the U.S. Supreme Court. As the year draws to a close, it’s a good time to reflect on the hundreds of eDiscovery decisions judges made in the past 12 months. Here are some highlights of 2017’s major eDiscovery cases:

Electronic Discovery Sanctions

Goodyear Tire & Rubber Co. v. Haeger

For the first time, a case involving sanctions for misconduct in eDiscovery reached the Supreme Court. In Goodyear Tire & Rubber Co. v. Haeger, 137 S.Ct. 1178 (2017), the justices were asked to decide whether the lower court properly ordered the defendant to pay all the plaintiff’s fees and costs as a sanction for a dishonest discovery response. The Supreme Court held that when a federal court exercises inherent authority to sanction for bad-faith conduct by ordering a party to pay the opponent’s legal fees, it can only award fees incurred solely as a result of the misconduct, meaning the fees the party without fault would not have incurred but for the bad faith. The key takeaways from the case are that sanctions must be compensatory, not punitive; and there must be a causal, not temporal, link between the misbehavior and the legal fees paid by the opposing party.

Mueller v. Swift

Another highly publicized case involved singer-songwriter Taylor Swift. In Mueller v. Swift, 2017 WL 3058027 (D. Colo. July 19, 2017), the plaintiff produced a recording, but not in its entirety, claiming he lost some of the audio evidence from both spilling coffee on a laptop and a back-up hard drive malfunction. Though neither party cited Rule 37(e), the court relied on the amended rule as a basis for the decision. While the judge ruled that the loss of evidence resulted from more than mere negligence, the judge denied an adverse inference. However, the judge did allow the defendants to cross-examine the plaintiff in front of the jury concerning the record of how the evidence was spoiled.

Proportionality in eDiscovery

A key theme driven home in many cases in 2017 is that relevancy and proportionality need to be the gatekeepers in eDiscovery. Given all the data created on a daily basis, discovery would take decades and be cost-prohibitive without these two variables. Judges were able to rely on the amended federal rules this year to weigh the usefulness of the data against the burden of its production.

In re State Farm Lloyds

The case, In re State Farm Lloyds, Nos. 15-0903/15-0905, WL 2323099 (Tex. May 26, 2017), is the perfect example of a judge balancing cost with usefulness. State Farm kept claim files in a static format for business reasons and wanted to produce the data in that same format with optical character recognition (OCR) software and limited metadata. The plaintiffs wanted the files in native format with all metadata, which would have cost State Farm a large sum of money to produce.

The Supreme Court of Texas held that when electronically stored information in a reasonably usable form is readily available, courts must balance the burdens with the benefits and proportionality considerations before ordering production in a different and more expensive, or burdensome, form.

Regarding form of production and proportionality, the court stated that the “taproot of this discovery dispute is whether production in native format is reasonable given the circumstances of this case. Reasonableness and its bedfellow, proportionality, require a case-by-case balancing of real needs based on the particulars of the case and the burdens it presents.”

The court decided that the benefits of native files would not overcome the burden it would take State Farm to get the data in that format and allowed State Farm to produce TIFF files with limited metadata.

Tingle v. Hebert

Another case that spoke to proportionality was Tingle v. Hebert, No. 15-626, 2017 WL 2536584 (M.D. La. June 9, 2017), where the defendant asked for all email and text messages sent or received on the plaintiff’s personal phone as well as all information the plaintiff deleted from his employer-issued phone.

The request was found not proportional because it wasn’t limited or particularized in any way or to any subject, such as communications exchanged between the plaintiff and the defendant, and the time period was not limited. With so much data created every day, it is expensive and time-consuming for a party to collect and review data in response to broad requests. To pass the proportionality standard, parties must craft requests with specificity to what is needed with appropriate subject matter and time period limitations.

Possession, Custody and Control

No longer is email our main form of communication. Million-dollar deals are now done on instant messaging. Text messaging has replaced phone conversations, and applications like WhatsApp are taking over as our main lines of communication. This has made possession, custody and control obligations much blurrier than in the past.

Ronnie Van Zant, Inc. v. Pyle

In Ronnie Van Zant, Inc. v. Pyle, 17 Civ. 3360 (RWS), 2017 WL 3271777 (S.D.N.Y. Aug. 23, 2017), there was a dispute about a movie being made about rock band Lynyrd Skynyrd. The movie’s director had many text messages relevant to the case, but they were all deleted when he handed in his phone. The defendant said that the director was not an employee, and as a result, the director did not have possession, custody or control of these text messages. The judge disagreed: Given that the director had a contract with the defendant and had a financial interest in the litigation, he should have known better then to delete text messages in his cellphone during the pending lawsuit. An adverse inference was granted.

Rule 34 Objections

In 2017, boilerplate objections were out and specificity was in. This year saw several key cases pushing judges to their breaking point when parties failed to adhere to the amended FRCP Rule 34(b)(2).

Fischer v. Forrest

In Fischer v. Forrest, No. 14 Civ. 1304, 2017 WL 773694 (S.D.N.Y. Feb. 28, 2017), Judge Andrew J. Peck stated that “from now on in cases before this court, any discovery response that does not comply with Rule 34’s requirement to state objections with specificity (and to clearly indicate whether responsive material is being withheld on the basis of [such] objection) will be deemed a waiver of all objections (except as to privilege).”

Liguria Foods Inc. v. Griffith Laboratories Inc.

Then, in Liguria Foods Inc. v. Griffith Laboratories Inc., 14-cv-3041, 2017 WL 976626 (N.D. Iowa Mar. 13, 2017), Judge Mark W. Bennett stated that simply objecting to producing documents on the grounds of privilege is insufficient; parties should be producing privilege logs at the same time they respond to Rule 34 discovery requests. Although he did not issue any sanctions, he went on to say there will be no more warnings and if parties continue to improperly use boilerplate objections, they will be placing themselves at risk for “substantial sanctions.” Whether Liguria changes the timing of when privilege logs need to be produced will likely be tested in 2018.

Privilege and Inadvertent Disclosures

Finally, eDiscovery case law in 2017 continued to address inadvertent disclosures and the potential waiver of privilege. Judges recognize that with so much data to review, it is easy for a privileged document to accidently slip out the door. To avoid a waiver to the privilege, Federal Rule of Evidence 502 clawbacks should always be utilized.

Irth Sols. v. Windstream Commc’ns

However, Irth Sols. v. Windstream Commc’ns, 2017 WL 3276021 (S.D. Ohio Aug. 2, 2017), is a reminder that a clawback is not always enough; reasonable review protocols must also be in place. In this case, the defendant turned over a partial production 27 days after it was due. The documents consisted of 2,200 pages, including 146 pages (43 documents) that were privileged. When preparing a privilege log after production, the defendant became aware of the mistake and attempted to claw back the documents. The court found the defendant did not take reasonable steps to prevent disclosure in line with the defendant’s “reckless review;” therefore, the privilege was waived. The court also stated that it “recognizes an attorney’s responsibility to guard that privilege and holds an attorney accountable when normal cracks become chasms—as was the case here.”

Harleysville Ins. Co. v. Holding Funeral Home Inc.

Another interesting case is Harleysville Ins. Co. v. Holding Funeral Home Inc., 2017 WL 4368617 (W.D. Va. Oct. 2, 2017), where a U.S. magistrate judge and a U.S. district judge disagreed on whether the plaintiff waived privilege and work-product protection by sending an unsecured email with an unsecured hyperlink to a Box account containing privileged information. The plaintiff admitted that “any person who had access to the internet could have accessed the (site) simply by typing in the URL address in a web browser.”

The magistrate judge ruled these documents were no longer privileged as they were available for all to see and the action of posting the information online was not unintentional. Furthermore, the plaintiff knew the information was not protected, and “did not take reasonable steps to prevent its disclosure or to rectify the situation.” The magistrate’s ruling was later reversed when the district judge deemed the disclosure inadvertent. However, a key takeaway from this case is that attorneys need to be aware of evolving technology to ensure confidential information is properly secured.

Technology-Assisted Review

2017 also saw technology-assisted review (TAR) continue to be used and approved throughout the United States and globally.

McConnell Dowell Constructors v. Santam LTD (Australia)

In the McConnell Dowell Constructors v. Santam LTD (Australia) Dec. 2016, case out of Australia, the judge appointed a special referee who suggested TAR be used and showcased the process of utilizing such technology, as well as the cost and time benefit of using TAR. It also pointed out that traditional document review is significantly less consistent and accurate as compared with predictive coding.

In FCA v. Cummins

In 2017, we forced judges to start making judgment calls on how TAR processes can be used. In FCA v. Cummins, No. 16-cv-12883-AC-SDD, 2017 WL 2806896 (E.D. Mich. Mar. 28, 2017), the judge was asked to determine if and when key terms can be used when TAR is also utilized. Though hesitant to intervene, the court conducted an extensive review of letters and proposed orders, including reading The Sedona Conference TAR Case Law Primer, and found that it is preferable to employ TAR prior to conducting a word search. Whether this becomes the standard will be seen in the coming year.

What’s Ahead in 2018

There will be continued reliance on proportionality and a greater exposure to the internet of things. If you are a gambler, odds are that privacy will be stealing the headlines in 2018. Currently, the Supreme Court has two major privacy cases expected to be handed down in early 2018 (United States v. Microsoft (formerly Microsoft v. United States) and Carpenter v. United States). Also, going into effect in May 2018 is the EU General Data Privacy Regulation (GDPR) which changes what sanctions can be levied against corporations for inadvertent disclosures of European citizen’s private data. With one year and many cases coming to a close, we now turn our attention to 2018 and the decisions it will bring.

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