Electronic Discovery & Computer Forensics : RenewData : Austin, Texas

In PSEG Power New York, Inc. v. Alberici Constructors, Inc. 2007 WL 2687670 (N.D.N.Y. Sept 07,2007) large-stakes construction litigation, plaintiff PSEG Power Inc. (“PSEG”) originally turned over more than 3,000 emails and 211,000 pages of documents, along with a disk containing e-mails. However, Magistrate Judge Randolph F. Treece directed PSEG to produce the emails in the form requested by defendant Alberici Constructors Inc. (“Alberici”) and do so at its own expense.

Alberici was a contractor in construction of a $25 million, PSEG power plant outside of Albany. In 2005, PSEG sued Alberici for $ 4.4 M improperly performed work and failure to complete jobs at the Bethlehem Energy Center project. Alberici filed a mechanic's lien against PSEG for $6.8 M and countersued PSEG for $11.4 M.   Both companies made complex discovery requests for documents and communications concerning the Bethlehem project.

In January 2007, Alberici started to notice that the discovery materials PSEG delivered through an information materials vendor were incomplete. Although the 3,000-plus e-mails were present, many of the attachments that accompanied the messages were not. In some instances, there were up to 12 attachments per e-mail that became separated from their original messages. It appeared that the “vendor’s software was not compatible with the HTML format in which PSEG had provided its documents and that this incompatibility had resulted in the parent child link between the emails and attachments being broken.”

For nearly six months, PSEG, its vendor and Alberici tried to figure out methods to reattach the materials to the e-mail messages. Although the 750 GB of underlying data still existed, the metadata necessary to join the e-mails and attachments “was destroyed during [PSEG]s collection and formatting of the emails. PSEG tried to solve the problem by supplying a spreadsheet to Alberici that would match attachments with e-mails. But it did not work. An effort to reach a compromise failed when PSEG claimed it would cost an "unconscionable" $206,000 for it to redo the e-mail and attachment retrieval process. Alberici’s vendor estimated the cost at $37,500. The court proposed a protective order to allow Alberici’s vendor to recover the emails but PSEG rejected that proposal.

Once the court agreed that Alberici should get the discovery documents in a usable form, it had to determine who would pay for the production. PSEG alleged that the data was not reasonably accessible because of undue burden or cost. However, because Alberici had established good cause for the production of the data, a cost-benefit analysis was done according to the factors set forth in the Advisory Committee Notes to Rule 26:

1. the specificity of the discovery request;
2. the quantity of information available from other and more easily accessed sources;
3. the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources;
4. the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources;
5. predictions as to the importance and usefulness of the further information;
6. the importance of the issues at stake in the litigation; and
7. the parties’ resources.

The court found the factors in Alberici’s favor and ordered PSEG to bear its own costs. Further, the court acknowledged "the cost of retrieval in this matter is by no means cheap," but it may not be as high as the $206,000 estimated by PSEG and lower-cost alternatives were available. It stated "considering the monumental production issue that confronts us, $37,500 is a significant discount when compared to PSEG's vendor's proposal and may be a bargain," and "although no one wants to spend any significant amount of money on discovery, whether it be thousands of dollars or hundreds of thousands of dollars, but if they have to, PSEG's access to resources rivals, if not exceeds, Alberici's claim to resources."

Finally the court stated:

“But for [PSEG]s vendor creating this email attachment fiasco, we would not be having this discussion. Without question, attachments should have been produced with their corresponding emails as such are kept in the usual course of business. [PSEG] chose to provide the emails and attachments in this disassembled manner albeit unbeknowst to it at the time of production. Whether created by a software incompatibility or malfunction, such deficiency does not provide a sufficient excuse from presenting an important aspect of discovery in a convoluted fashion. And, [Aberici] should not be resigned to accept a flawed discovery process.”

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Lack of a meaningful meet and confer and purposeful sluggishness leads to failure to comply with numerous discovery obligations and potential sanctions in In re Seroquel Products Liability Litigation (2007 U.S. Dist. LEXIS 61287 (M.D. Fl. Aug. 21, 2007).

Magistrate Judge David Baker in this multidistrict litigation (MDL) products liability proceeding has sanctioned defendant AstraZeneca (“AZ”) for its failure to timely and systematically produce e-discovery. 

In January 2007, the court had entered a comprehensive Case Management Order regarding the timing and method of discovery, including detailed requirements for e-discovery. The court set forth the party’s document collection and production obligations and held that each party shall bear its own costs for the production of accessible data. The order allowed plaintiffs to conduct information interviews of AZ employed IT persons about approximately 14 categories of databases and the methods by which information could be produced or extracted. Additionally, the court commented that the defendant’s failure to “investigate and understand its own records and documents and to prepare them for production has not met expectations of the Court as discussed in the September 2006 Conference.”

In April 2007, the plaintiff’s motion to compel was denied to allow parties to confer “in good faith” but an evidentiary hearing on the motion was scheduled for a later date. That hearing was later canceled when AZ asserted that it would correct the deficiencies. Ultimately, plaintiff’s counsel did not believe the deficiencies were addressed and filed the motion for sanctions which was granted in part.

The sanctions were granted based on a number of AZ’s discovery failures. Despite requests by plaintiffs’ expert to meet with an equivalent IT counterpart to discuss various technical problems with production of over ten million pages and an explicit order to allow plaintiffs to interview AZ’s IT employees, no one was provided and no discussion took place. AZ’s unilateral decision to conduct key word searches on a number of its databases to locate relevant documents without coming to an agreement with the plaintiffs about the words to be used was a concern. The court found the key word search was “plainly inadequate,” attachments to emails were not provided, relevant emails were omitted, AZ’s de-duplication method “remains mysterious,” production was tardy, AZ’s efforts in preventing and solving its technical problems were “woefully deficient,” and there was no quality control. The documents were “unsearchable, and unusable.”

Ultimately, the court reached the conclusion that AZ was “purposely sluggish” in its production to plaintiffs. The court noted that the sluggishness had benefited AZ and prejudiced the plaintiffs by limiting the time available to for review and follow up investigation. Therefore, prejudice was presumed. The court had little sympathy for AZ’s attempt to blame its vendor by responding with citations to appellate decisions holding that continued reliance on an ineffective vendor is itself subject to sanctions.

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District Judge Cooper of the U.S. District Court of California has affirmed Magistrate Judge Chooljian’s finding that contents of a web server’s random access memory (“RAM”) are discoverable. Columbia Pictures Indus. v. Bunnell, C. D. Calif., No. CV 06-1093, discovery order 8/24/07. Defendants had challenged the magistrate’s prior ruling that required a BitTorrent site sued for copyright infringement to turn on the site's logging function and begin capturing and retaining user requests for dot-torrent files. See Columbia Pictures Industries v. Bunnell, 2007 WL 2080419 (C.D.Cal., May 29, 2007).

In this motion, Judge Cooper was asked not to interpret “electronically stored information” (”ESI”) to include data stored in RAM and to exclude RAM from discovery because it is too “ephemeral”.  Defendants and amici argued that information held in a computer’s RAM was not ESI under Federal Rule of Civil Procedure 34 because even though it was “stored”, it was not stored for later retrieval because of its very temporary period of storage.  The court found this interpretation of “stored” unsupported by the Rule, the Rule’s commentary, or any Ninth Circuit precedent involving RAM.  Following the magistrate’s reasoning, the Judge Cooper cited MAI Systems Corp. v. Peak Computer Inc., 991 F.2d 511 (9th Cir. 1993).  In that copyright infringement case, the court concluded that software copied into RAM was “fixed” in a tangible medium and was sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.  Therefore, Judge Cooper rejected the position that ESI requires a degree of permanency not found in RAM.

Additionally, the court dismissed concerns that this approach would have a devastating impact on the record-keeping obligations of businesses and individuals. The court clarified that the decision's effect is limited to the defendants in the instant case only.

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In Peskoff v. Faber, 2007 2416119 (D.D.C. August 27, 2007), U.S. Magistrate Judge John M. Facciola attempts to resolve ongoing discovery issues in Plaintiff Peskoff’s suit to recover damages for financial injury resulting from Defendant Faber's operation of a venture capital fund, NextPoint GP, LLC ("NextPoint").

As indicated in earlier opinions, the main point of dispute was the sufficiency of the search done by Faber for documents in response to Peskoff’s discovery requests. Specifically, Peskoff sought emails from his tenure with NextPoint that "are highly likely to contain information relating to the ownership issues in this case, the suspect transactions identified in the Complaint and other relevant matters." Faber had produced computer disks containing electronic documents, obtained from Peskoff's computer, but these disks did not include any of Peskoff’s emails between mid-2001 and mid-2003, and Faber had no explanation why the emails were not produced. He also had no explanation regarding the current location(s) of email from that time period or what was done to locate them. Faber insisted that all of Peskoff's emails from his computer had been produced and that they no longer existed on the system. Judge Facciola ruled that Faber’s search for responsive emails had been inadequate, ordered him to do a more thorough search, and to describe his efforts in a sworn statement and testimony at a subsequent evidentiary hearing.

In this opinion, Judge Facciola considered whether a forensic examination should be done to look for additional material, and if so, who should pay for such an examination. He determined that the importance of this type of discovery in resolving the issues in the litigation was challenging because "the importance of the results of the forensic examination to be had can only be accurately assessed after it is done." However, he concluded that the information produced thus far seemed to indicate the possible existence of additional similar information.

The parties were directed to collaborate on an RFP process to seek bids from forensic computer technicians to determine the likely cost of searching for, restoring, and converting email from the computers in question. Judge Facciola also addressed the arguments presented by Faber’s attorney who was also representing NextPoint. He argued that since Peskoff had only sued Faber and not NextPoint, then NextPoint was simply a third party to the suit and not under any obligation to preserve documents. This argument was ruled to be untimely and was therefore waived.

Finally, Judge Facciola expressed concern over apparent inaccuracies or inconsistencies in the testimony provided by both Peskoff’s and Faber’s counsel, ordering both to submit written explanations to the court for previous erroneous and/or contradictory statements they made regarding discovery issues in the case.

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