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Summaries, news and resources relating to eDiscovery in Delaware and beyond.
Showing 3 posts in Clawback/Quick Peek.
This is the second in a series of posts summarizing the 7 most important eDiscovery cases in Delaware in 2014.
The second case is 112359 Factor Fund, LLC and Five Nine Group, LLC v. Flux Carbon Starter Fund, LLC, Mary Carroll, Kevin Kreisler, and James L. Sonageri, C.A. No. 9568–VCL, Telephonic Oral Argument on Plaintiffs' Motion to Compel and Rulings of the Court, 06/20/2014.
In response to Plaintiffs' Motion to Compel, the Defendants claimed they did not have sufficient time or resources to review all 73,000 documents yielded by the search terms used. Vice Chancellor Laster was not swayed by these arguments. An Order had been entered earlier in the case requiring the parties to not only meet and confer regarding search terms, but to also "do more than the standard" and "confer regarding the use of an early data assessment tool…to focus on the custodians and time periods most likely to have responsive electronic documents”. Defendants’ reasons for missing the production deadline included delays in collecting the documents from their clients and insufficient manpower to properly review them. The Vice Chancellor found these explanations to be insufficient. The Court explained that in an expedited case, the parties need to think about approaches other than the “old school attorney-by-attorney review”. Had an early data assessment tool been appropriately used, as instructed, the number of search hits would not have come as a surprise and counsel could have thought ahead and planned appropriately to meet the discovery deadlines. The Court ordered that a copy of the transcript be given to Defendants clients, to help them understand that not complying with a discovery order will have serious consequences. More ›
When it's a quick peek, as was ordered in ACS State Healthcare, LLC v. Wipro, Inc. and Wipro, Ltd., No. 4385-VCP ( Del. Ch., July 23, 2009). This is believed to be the first order of its kind in Delaware and continues the Court of Chancery's recent trend of providing eDiscovery guidance to Delaware practitioners.
The title of this post may be a bit misleading though and may simply reflect my own ignorance of the true distinction between quick peek and clawback. (Or maybe I'm being pedantic.) Certainly, there are clawback provisions in this order, but the production of documents without review is what makes this a quick peek. The two are often presented as alternative means of protecting privilege waiver in eDiscovery, but it seems that clawback protects privilege while quick peek shifts costs. So quick peek is really clawback plus cost-shifting?
In Part V of this series, we summarized the cases from late 2006 and all of 2007. Quick summary of those cases: the District Court concluded that imaged files should be the default form of production absent party agreement, the Bankruptcy Court issued summary judgment against a party found to have knowingly destroyed ESI despite reasonably anticipating litigation, the Superior Court declared spoliation requires intent not just negligence, and the Court of Chancery required discovery requests be supported by “a particularized showing of need.” On to 2008.
In a series of cases culminating in State v. Sisson, 2008 WL 162825 (Jan. 17, 2008), the Superior Court dealt with multiple issues of admissibility and validity of electronic evidence in a criminal case. Michael Arkfeld's eLaw Exchange provides the following concise summary:
At trial, Sisson filed a motion to suppress evidence collected at his home pursuant to warrant on four grounds: 1) the evidence was stale 2) the probable cause information was insufficient because the affidavit did not show that “emails sent by an internet ‘screen name’ linked to” Sisson were actually sent by him, nor did it demonstrate reliability of sources 3) ”police intentionally or recklessly omitted information” that Sisson may have been the victim of “spoofing” and 4) that the affidavit was recklessly or intentionally misleading in that it incorrectly suggested that the police had actual possession of “the illegal emails to which pornographic images allegedly were attached.” In a ruling on the probable cause argument, the court held that AOL, an internet service provider, was a reliable informant as it was equivalent to a “citizen eyewitness to a crime” and thus no “independent corroboration” of the information it provided was necessary. The court found that there were sufficient facts set forth in the affidavit to support a finding of probable cause “because the ‘screen name’ associated with the email and linked to Defendant was sufficient to allow a reasonable person to believe that ‘seizable property would be found at the address of the Internet subscriber with whom the name is registered’.”
Sisson subsequently challenged his conviction on several counts of Sexual Exploitation of a Child and Unlawfully dealing in Child Pornography to the Delaware Supreme Court and said conviction was affirmed on all grounds. On Motion for Post Conviction Relief, Sisson argued, in pertinent part, that he suffered ineffective assistance of counsel because his attorneys either did not argue or improperly argued on appeal: that a password was not required for email “spoofing”; “that the detectives acted with reckless disregard for the truth by not stating in the search warrant that they did not have the IP address of the computer that sent the email”; that a username alone was not enough to establish a link between Sisson’s home and the computer that transmitted the email; and that the informants supplying the information for the search warrant (AOL and NCMEC) were unreliable. Defendant’s motion was denied on all counts.
In a very short order in February 2008, the Court of Chancery requires a non-party to submit the credentials of its eDiscovery vendor/consultant. Solow v. Aspect Resources LLC, 2008 WL 441394. Competence of third party vendors and counsel is an issue we’re likely to see more of in the future. In a recent case out of Washington State, the court reduced attorney’s fees in connection with eDiscovery work for inexperience.
In the spring, in In re Kent County Adequate Pub. Facilities Ordinances Litig. (April 18, 2008), the Court of Chancery addresses the issue of attorney-client privilege waiver and applies a test that almost mirrors what will become new FRE 502 a few months later. In response to Petitioners’—landowners and developers—motion to compel in an underlying action, Kent County argued that some of the documents requested were privileged. Kent County asserted privilege over a set of documents it had voluntarily produced to support its motion to preclude the depositions of the individual respondents. The Court found that privilege had been waived for these documents. Another set of documents, however, was produced inadvertently, and Kent County sought to recover them as privileged. The Court, in agreeing to the return of the documents, applied the following test:
In order to determine whether the inadvertently disclosed documents have lost their privileged status, the Court must consider the following factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) the scope of discovery and extent of disclosure; and (4) the overall fairness, judged against the care or negligence with which the privilege is guarded.
In applying this test, the Court cited the Delaware Superior Court’s decisions in Monsanto Co. v. Aetna Cas. & Sur. Co., 1994 WL 315238 (Del. Super.) (citing Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 104 F.R.D. 103 (S.D.N.Y.1985).
In summer 2008, in In re Intel Corp. Microprocessor Antitrust Litig., 2008 WL 2310288 (June 4, 2008), the District Court adopted a special master’s report finding waiver of work product protection. The plaintiffs moved to compel production of Intel’s attorneys’ custodian interview notes relating to litigation hold compliance. The parties had previously reached a privilege waiver agreement, but the special master found that the agreement did not extend to these notes. However, the special master found a privilege waiver for any custodian statements voluntarily disclosed by Intel. The special master opined that finding otherwise would have allowed Intel to "use its sword to assert facts while at the same time shield" the plaintiffs from Intel’s claim of human errors in its performance of its duty to preserve evidence. The special master concluded that protection of the non-core work product had been waived, so granted the plaintiffs motion for production.
Later that summer, the Court of Chancery, in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 2008 WL 3522445 (Aug. 18, 2008), enforces a “clawback” agreement. Huntsman inadvertently produced an email drafted by one of its outside counsel and sent to another of its outside counsel and its investment banker in connection with a merger with Hexion. The Court found the email privileged and allowed for its clawback pursuant to the confidentiality order.
About a month later, the Court of Chancery, in a letter decision in Kinexus Representative LLC v. Advent Software, Inc., C.A. 1161-CC, reiterates that native or OCR production is not required “without a particularized showing of need.” Advent produced documents in non-searchable TIFF format. Kinexus moved to compel Advent to comply with an instruction to produce searchable ESI. The Court declined to find OCR required by court rules. The Court did find that Advent’s offer to produce “extracted text” was an acceptable compromise but ordered Kinexus to pay for the processing. It’s not clear what format the “extracted text” was provided in. If anyone if familiar with this case and knows how the extracted text was provided, please leave a comment. I’m sure I’m not the only one who is curious about that.
On September 19, 2008, President Bush signed FRE 502 into law. The newly adopted rule was identical to the one approved by the Judicial Conference of the United States in September 2007.
At last, we reach 2009! We’ll cover 2009 in the next and final installment of this series. In the meantime, if you know of significant Delaware eDiscovery cases from 2008 that you think I should have included, please post a comment to let everyone know.