Discovery Lessons Learned in the first half of 2010

William E. O'Neil, Jr., Esq., eDiscovery expert

by William E. O’Neil, Jr, Esq.

It has been an interesting first half of the year for e-Discovery cases. The “Pension Committee” case “revisited” the Zubalake decisions and re-affirmed the duties for legal counsel when managing the Discovery & legal hold processes.  But, it still seems some are willing to take the risks of possible spoliation of evidence…I speak with clients across the country and have been asked the question more than once…”why should I care about Pension Committee…I am not in the 2^nd Circuit…”

Because…the standards established in in Zubalake, codified in the Federal Rule changes and “revisited” in “Pension Committee” are the standard for legal counsel. They are just explained in detail in “Pension Committee”.  Counsel needs to understand who the “key players” are, what ESI exists, where it resides and ensure the risk of spoliation is reasonably mitigated.  The lack of an e-Discovery strategy and a defensible process for legal hold management and preservation & collection is not a viable defense anymore…whether spoliation is negligent or intentional.

There was an interesting spoliation case decided in the 10^th Circuit.  In “ Medcorp”, the plaintiff allegedly destroyed ESI on 43 hard drives .  The fact that it was done was not in dispute, whether it was intentional, willful or negligent and what should be the consequences of the destruction was at issue.   The defendants requested the action be dismissed and the Plaintiffs argued minimal impact by having provided “some” of the ESI from another source.

The court applied the standards for determining sanctions for spoliation outlined in the “Pension Committee” decision…“[a]ppropriate sanctions should ‘(1) deter the parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore “the prejudiced party to the same position [it] would have been in absent the wrongful destruction of evidence by the opposing party.”

Here, the Court found the Plaintiff’s conduct was negligent rather than intentional. As such, the Court awarded the defendant’s attorney fees, expert witness fees and expenses related to litigating the spoliation issue…AND ordered a “negative inference” jury instruction…allowing the jury to infer the ESI on the 43 hard drives would be detrimental to the Plaintiff’s case.

This is a steep price for counsel to pay for not exercising proper oversight over discovery!

SEE: Medcorp., Inc. v. Pinpoint Technologies, Inc., et al 2010 WL 2500301 (D. Colo.).

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