Source: https://ogalaws.wordpress.com/2013/03/
Timestamp: 2019-04-20 12:13:44+00:00

Document:
To Gatto from Zubulake: 2 Thumbs-up for Better Information Governance/Anti-Spoliation.
The Virginia wrongful death litigation of Lester v. Allied Concrete, in which cost sanctions were awarded for spoliation of online evidence, has a new compatriot in the New Jersey case of Gatto v. United Airlines. Counsel should be mindful when advising clients with regard to electronic evidence, and Judges are taking note and increasingly ready to issue both adverse inference “spoliation instructions” along with steep monetary sanctions for spoliation of evidence due to a failure of Information Governance generally, and of document retention practices, specifically; especially in that exponentially expanding category of Electronically Stored Information (ESI).
One member of the Gartner Group has defined Information Governance, as “[…] the specification of decision rights and an accountability framework to encourage desirable behavior in the valuation, creation, storage, use, archival and deletion of information. It includes the processes, roles, standards and metrics that ensure the effective and efficient use of information in enabling an organization to achieve its goals”.
Focusing on the last 7 words of this definition “enabling an organization to achieve its goals”, winning the case should not come at the expense of sanctions that lead to a lost case, that wipe-out the award from a victory, or that leave the winner of a pyrrhic victory in the negative after paying a sanctions award to the losing but smiling party. In at least one of the above cases of Lester and Gatto, Counsel had apparently advised the client to “clean-up” their Facebook, or something like that. It is vitally important that Counsel get to grips and up to date with the expanding offerings of online social media tools, and their impacts on the litigation landscape, the document retention matrix, the scope of Professional Responsibility, and the cost of sanctions for spoliation and failures to produce.
“Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation”. [emphasis added].
As shown in Mosaid, Zubulake, and Goodyear, Not all Judges and Magistrate Judges, will see mere adverse inference instructions, which allow the errant side to still try their luck, enough of a deterrent. Indeed, with a January 15, 2010 opinion entitled Zubulake Revisited: Six Years Later, Judge Scheindlin clarified her thoughts on Information Governance and Discovery (e-Discovery) of Electronically Stored Information (ESI) by providing several solid, useful, bright line rules distinguishing between ESI lapses as negligence, willfulness, and gross negligence.
“Gross negligence has been described as a failure to exercise even that care which a careless person would use”.
In addition to her analysis, Judge Scheindlin issues a clear caveat as follows “[t]hese examples are not meant as a definitive list. Each case will turn on its own facts and the varieties of efforts and failures is infinite”. However, applying the above standards to specific steps of the litigation process, she continues in what I here condense and present as a handy cheat-sheet.
1. Preservation of Relevant Information.
“A failure to preserve evidence resulting in the loss or destruction of relevant information is surely negligent, and, depending on the circumstances, may be grossly negligent or willful”.
2. Intentional Hampering Acts (*author’s terminology).
“[…] the intentional destruction of relevant records, either paper or electronic, after the duty to preserve has attached, is willful”.
3. Issuance of a Litigation Hold.
“Possibly after October, 2003, when Zubulake IV was issued, and definitely after July, 2004, when the final relevant Zubulake opinion was issued, the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information”.
“[…] depending on the extent of the failure to collect evidence, or the sloppiness of the review, the resulting loss or destruction of evidence is surely negligent, and, depending on the circumstances may be grossly negligent or willful. For example, the failure to collect records – either paper or electronic – from key players constitutes gross negligence or willfulness as does the destruction of email or certain backup tapes after the duty to preserve has attached”.
5. Litigation Dragnets (*author’s terminology).
“By contrast, the failure to obtain records from all employees (some of whom may have had only a passing encounter with the issue in the litigation), as opposed to key players, likely constitutes negligence as opposed to a higher degree of culpability”.
6. Additional Preservation Measures (*author’s terminology).
“[…] the failure to take all appropriate measures to preserve ESI likely falls in the negligence category”.
7. Assessing the Relevance and Prejudice of Spoliated Evidence (*author’s terminology).
“[…] for more severe sanctions – such as dismissal, preclusion, or the imposition of an adverse inference – the court must consider, in addition to the conduct of the spoliating party, whether any missing evidence was relevant and whether the innocent party has suffered prejudice as a result of the loss of evidence”.
8. Presumptions of Relevance; Jury Instructions (*author’s terminology; emphasis added).
“Where a party destroys evidence in bad faith, that bad faith alone is sufficient circumstantial evidence from which a reasonable fact finder could conclude that the missing evidence was unfavourable to that party”.
In the extreme, willful or bad faith conduct can bring jury instructions “that certain facts are deemed admitted and must be accepted as true”; in the mid-range, willful or reckless conduct may bring jury instructions imposing a “mandatory but rebuttable” presumption.
At the baseline-level, an instruction may issue that “permits (but does not require) a jury to presume that the lost evidence is both relevant and favorable to the innocent party. If it makes this presumption, the spoliating party’s rebuttal evidence must then be considered by the jury, which must then decide whether to draw an adverse inference against the spoliating party”.
9. Fitting the Sanction to the Conduct/Misconduct (*author’s terminology).
10. When Terminating Sanctions are Appropriate (*author’s terminology).
“However, a terminating sanction is justified in only the most egregious cases, such as where a party has engaged in perjury, tampering with evidence, or intentionally destroying evidence by burning, shredding, or wiping out computer hard drives”.
♦Get professionals involved in your Information Governance plans very early.
ESI is here to stay, and expanding in depth and breadth at an extreme pace; e-Discovery has caught-up, and is keeping up – at least in the Second Circuit and the Districts it comprises, and also in the United States Court of Appeals for the Federal Circuit. Counsel should follow-suit!
 Lester v. Allied Concrete, (Case No. CL08-150, and Case No. CL09-223), Final Order dated October 21, 2011 (Va. Cir. Ct. 2011). Online: >http://www.scribd.com/doc/78439131/Lester-v-Allied-Concrete-CL08-150-102111-Final-Order< The amount of the final sanction was a fees award of $722,000.00.
 This definition was laid down by United States Circuit Judge Joseph M. McLaughlin, writing the February 12, 1999 judgement of a unanimous 2nd Circuit panel in West v. Goodyear Tire & Rubber Co., 167 F3d 776, 779 (1999). There, the 2nd Circuit remanded a case on finding that outright dismissal of Plaintiff’s negligence action for spoliation (disposing of the allegedly malfunctioning device) was too draconian a sanction. It was followed by the Southern District of New York with United States District Judge Shira A. Scheindlin’s July 20, 2004 ruling in Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (2004) – sometimes also styled Zubulake V – an employment discrimination case involving spoliation by failure to preserve and produce backup email tapes, that was itself a precedent in the guidance the Judge issued for future electronic discovery practices; as well as by the New Jersey District Court with the December 7, 2004 ruling of United States District Judge William J. Martini, in Mosaid Technologies v. Samsung Electronics, 348 F.Supp.2d 332, 335 (D.N.J. 2004), also involving the spoliation of electronic evidence where the failure to specifically mention “emails” within/alongside a request for the production of “documents”, should not have permitted the non-production and willful destruction of those emails.
 See contra, Gatto, at note 3, supra, and accompanying text.
 Id. at page 7 of the 88 page Amended Opinion and Order.
 See Ekundayo George. GRC: Governance (Part 2). Published on ogalaws.wordpress.com, October 29, 2012, at note 12 and accompanying text. Online: >https://ogalaws.wordpress.com/category/regulatory-and-government-affairs/governance-risk-compliance-grc-and-sanctions/< Model e-Discovery Order for patent litigation, as presented to the Eastern District of Texas Judicial Conference on September 27, 2011, by the Honourable Randall R. Rader, Chief Judge of the United States Court of Appeals for the Federal Circuit.

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