Last week, the Department of Justice announced that Kazuaki Fujitani, a former Denso Corporation executive, agreed to plead guilty to obstruction of justice charges in connection with an Antitrust Division price fixing investigation. Fujitani agreed to serve one year and one day in U.S. prison for destruction and concealment of records and documents under 18

Just last week, I published this article with a colleague in BNA’s Digital Discovery & e-Evidence® regarding the implications of a recent federal court decision for common document retention policies. The article—entitled “Terminating Sanction for Destroying Files to Avoid Suit Raises Concern for Document Retention Practices”—analyzes the court’s decision Slep-Tone Entertainment v. Granito (2014 BL 4257D. Ariz., CV 12-298 TUC DCB, 01/08/14). As we observe in the article, the case exemplifies the adage “bad facts make bad law.” If restricted to its rather unusual facts, the case is of little note. But the court’s reasoning in granting summary judgment as a spoliation sanction against the defendant raises concerns for document retention policies motivated by similar objectives.

We counsel clients to significantly limit the volume of ESI they maintain for a variety of reasons. One compelling reason is to reduce litigation expense and exposure. After all, as we note in the article, the less ESI a company maintains, the less risk it produces some ‘‘smoking gun” document in unanticipated litigation and the less expense it incurs in discovery in any such litigation. Limiting ESI prospectively generally involves imposing limits on what and how much information employees can maintain. Auto-delete policies, for example, can be effective tools. Limiting ESI already on hand, however, generally requires deletion.
Continue Reading Eliminating ESI To Reduce Litigation Expense and Exposure: Sound Policy, But Not Without Some Risk

Last month, in In Re Pradaxa (Dabigatran Extexilate) Products Liability Litigation, a federal judge in the Southern District of Illinois ordered the defendants in a multi-district litigation (MDL) product liability case to pay nearly $1 million in sanctions for repeated and bad faith discovery violations, primarily based on the defendants’ failure to adequately preserve electronic files and text messages of key custodians. The court attributed many of the discovery failures to the “gross inadequacy” of the defendants’ litigation hold.

While the court’s decision to issue sanctions in this case is likely limited to the specific facts of this case – namely, the defendants’ reported multiple and repeated discovery failures – the case nonetheless demonstrates certain important considerations for litigants in assessing their preservation duty: (1) the need for potentially broad preservation efforts in large, complex cases; (2) the need to reassess and possibly expand preservation notices as litigation develops; (3) the potential value of coordinating with the other side, and possibly the court, on the scope and recipients of preservation notices; and (4) the potential need for specialized e-discovery counsel as challenges begin to accumulate.


Continue Reading Repeated E-Discovery Failures Lead to $1 Million Sanctions

Earlier this month, the U.S. District Court for the District of Kansas “substantially revised its ESI guidelines to address that particularly critical and rapidly evolving subject.” As part of an ongoing effort to adapt its local rules and guidelines to ensure “that civil litigation actually is handled in the ‘just, speedy, and inexpensive’ manner contemplated by Rule 1 of the Federal Rules of Civil Procedure,” the Court’s Bench-Bar Committee approved recommendations made by various working groups of its Rule 1 Task Force. That task force project included a working group dedicated to e-discovery, and the result is that the Court’s ESI Guidelines have been revamped to incorporate the growing volume of e-discovery case law and guidance published in recent years.

Now twelve pages instead of its original five, the revised Guidelines include various notable updates. For example, the Guidelines now address the use of technology-assisted review (TAR), they reference the Sedona Conference Cooperation Proclamation, and they instruct counsel about the availability of Federal Rule of Evidence 502(d) to protect against waivers of privilege. The new ESI Guidelines undoubtedly place the U.S. District Court for the District of Kansas as one of the leading federal courts in the area of civil litigation e-discovery.
Continue Reading Kansas Federal District Court Revamps ESI Guidelines To Address Developments in E-Discovery Case Law, TAR and Social Media Evidence

On Wednesday August 14, 2013, I will be participating in a free BNA webinar exploring the constitutional and practical dimensions of ESI in federal and state criminal actions. I will be speaking with an experienced group of panelists, including Hon. Craig B. Shaffer, United States Magistrate Judge, District of Colorado; Roy Altman, Assistant United States

It can be difficult to identify the point at which the duty to preserve relevant information for litigation is triggered. What is often more difficult, however, is defining the scope of what must be preserved after the duty has been triggered. Given the vast (and growing) volume of electronically stored information (ESI) typically maintained, organizations must have information governance policies and practices in place that routinely destroy ESI that is no longer needed for business purposes. Those policies and practices must be suspended with respect to ESI that is subject to a legal duty to preserve, but defining the scope of what must be retained can be challenging, particularly at the early stages when litigation is reasonably anticipated or a complaint has just been filed, which is when these decisions are made.
Continue Reading Judge Grewal Takes a Reasonable Approach to Defining the Scope of the Duty to Preserve

In a prior post, I wrote about a criminal trade secrets theft case in which spoliation in related civil litigation was charged as obstruction of justice. I noted that “[t]he prospect of criminal charges for spoliation in civil litigation raises the stakes for civil litigants, particularly where a parallel criminal investigation is a possibility . . . .” Last week, this scenario arose again, as it was announced that Halliburton will plead guilty to a criminal offense based on ESI spoliation that appears to have first arisen in the massive civil litigation over the Deepwater Horizon disaster.

According to the Information and Plea Agreement, following the Deepwater Horizon oil spill, Halliburton employees used a proprietary 3D modeling program to examine aspects of the drilling equipment on two occasions. On both occasions, the employees were told to delete the resulting data and reluctantly did so. Halliburton was a contractor to BP, and these events seem to have been uncovered by BP in the ensuing civil litigation when it became apparent from Halliburton emails that the 3D modeling data once existed but had not been produced. Resolution of this spoliation issue in the civil litigation is still pending. In the meantime, however, the spoliation became the basis for a criminal charge against Halliburton in the parallel criminal investigation by the Department of Justice.
Continue Reading Spoliation of ESI Charged as Criminal Offense Under Computer Fraud and Abuse Act

On June 20, 2013, I participated in a one-hour webinar regarding “Bring Your Own Device” (or BYOD) policies. I addressed certain e-discovery issues involving BYOD policies. An audio recording and instructional slides are available here for those who missed it. The webinar was part of a monthly series entitled Third Thursday – Crowell & Moring’s Labor and Employment Update. This series is dedicated to helping our clients stay on top of developing law, emerging compliance issues, and best practices. I had the pleasure of joining my colleagues Tom Gies and Chris Calsyn from our Labor & Employment Group on the roundtable panel.
Continue Reading Bring Your Own Device (BYOD) Policies Also Bring Risk And Cost

In conjunction with the 2013 American Bar Association annual State of Criminal Justice, I have published a new article on “E-Discovery in Government Investigations and Criminal Litigation.” The article provides an in-depth look at many of the current and cutting edge issues raised by e-discovery in this context, including the search and seizure

A finding of bad faith is not required for a remedial jury instruction when the government’s negligent destruction of evidence significantly prejudices a defendant, the Ninth Circuit ruled earlier this month in its panel decision in United States v. Sivilla, No. 11-50484 (9th Cir. May 7, 2013) (Noonan, J.). However, bad faith—or a showing that the exculpatory nature of spoliated evidence was apparent to the government—remains necessary for complete dismissal under Arizona v. Youngblood, 488 U.S. 51 (1988).

In June 2010, Victor Hugo Sivilla loaned his Jeep to his sister’s boyfriend for several hours. Two days later, Sivilla was arrested after U.S. border agents found $160,000 worth of cocaine and heroin in his vehicle’s engine manifold. After photographing the Jeep’s engine compartment, the case agent turned the vehicle over to the Department of Homeland Security (DHS) forfeiture section.
Continue Reading Good Faith Not Good Enough? Ninth Circuit May Require a Remedial Jury Instruction After Government Spoliation in a Criminal Case