Tag Archives: sanctions

Evidence destruction leads to ruling U.S. was negligent

Under the civil rules of procedure, a sanction for the destruction of evidence would include an adverse finding.  In other words, if you are a party to a lawsuit and destroy evidence, the court may find that you were guilty of the allegations.

One of the reasons for this is that now, the court has no way of telling what the evidence said.  Would the evidence point to the party knowing about the problem?  Would the evidence show the party did nothing while it knew?  Would the evidence show nothing?

That is why it is so important to write a Spoliation Letter.  An Spoliation Letter is a letter that explains your duty to preserve evidence.  The letter explains that because there is a lawsuit (or there will be one), you now have to stop destroying evidence.

As an attorney, regardless of what side you are in, you have a duty to advise your client.  A big part of discovery is finding relevant evidence.  It would be against the idea of justice to go about destroying evidence.

This case highlights the importance of not destroying evidence.  In this case, in 2009, a 9-year old boy was at a mountain trail in Lassen Volcanic National Park when the retaining wall gave way.  Unfortunately, the boy died from this accident.

Court records show a complaint that the chief of maintenance shredded all of his documents, some of which dealt with visitor safety issues.  The documents were shredded sometime around December 2009 and January 2010.

As a sanction for destruction of evidence by the National Park Service in a wrongful death case, a federal judge in Sacramento, Calif., ruled Tuesday that the United States was negligent.

U.S. District Judge Nunley, held that the government was negligent “for all purposes in this case.”  The judge found that the government “purposely destroyed” the remains of the retaining wall, and that the park director and some staff knew the wall was unsafe, the newspaper says.

“What is less clear, although highly suspicious, is whether defendant [destroyed] evidence other than the wall,” U.S. Magistrate Gregory G. Hollows wrote in a previous decision.

Still undecided in the case and expected to be addressed at a June hearing is whether the government can assert a “discretionary function” defense under the Federal Tort Claims Act. The government argues that those in charge of the park had discretion to decide whether or not to repair the wall, and hence the government cannot be held liable for their decision-making.

via As sanction for destroying evidence, federal judge finds US negligent in wrongful death case – ABA Journal.

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Major Possible Changes to Federal Discovery Rules

Corporate Counsel reported about a very important and significant change that might occur next year.  Here are the highlights of the proposed amendments (starting on Page 91 of 322).

The e-discovery rules may change once again by next year.  The United States Court’s Advisory Committee on Civil Rules voted last week to send proposed amendments to the Standing Committee on Rules of Practice and Procedure.  The Standing Committee will consider approving or rejecting the proposal in early June.

The most significant proposals would narrow the scope of discovery under Rule 26; impose or reduce numerical limits on written discovery and depositions under Rules 30, 31, 33, and 36; Rule 37 will adopt a uniform set of guidelines regarding sanctions when a party fails to preserve discoverable information; and Rule 34 will tighten the rules governing responses for production of documents.

Rule 26’s proposed amendments are as follows:

  • Rule 26(b)’s proposed amendment restricts the defined scope of discovery to information that is “proportional to the needs of the case.”  The language is as follows:

    “and proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

    These proportional considerations are currently listed in Rule(b)(2)(c)(iii).  This amendment would mandate adherence by the parties without court intervention.

  • Rule 26(b)’s proposed amendment would delete the following sentences:

    (1) “For good cause, the court order discovery of any matter relevant to the subject matter involved in the action.  Relevant information need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

  • Note, that the proposed amendment for Rule 26(b) states that “Information within this scope of discovery need not be admissible in evidence to be discoverable.
  • Rule 26(c) (protective orders) adds “or the allocation of expenses.”

Rules 30’s and 31’s proposed amendments are as follows:

  • The number of depositions (oral and written) would be reduced from 10 to 5.
  • The limit of an oral deposition is reduced to 6 hours.
  • The number of written interrogatories would change from 25 to 15.
  • The number of requests will be 25, except for requests relating to the genuineness of documents.
  • There will be a presumptive limit on the number of Requests for Admissions a party may serve.
  • A court order or a stipulation by the parties may increase the limits on any numerical discovery.

Rule 34’s proposed amendments (which govern the production of documents and electronically stored information) are as follows:

  • The objections to document requests must be stated with specificity.  This requirement has already been applied to interrogatory responses under Rule 33.
  • When the responding party must state that it will produce the requested documents (instead of permitting inspection), the production must be completed by the date for inspection stated in the request or by a later reasonable time stated in the response.
  • A party objecting to a document request must state whether any responsive materials are being withheld on the basis of the objection.

Rule 37(e)’s proposed amendment (which concern sanctions for failure to preserve discoverable information) state:

  • A court may impose sanctions when it finds that a party failed to preserve information that should have been preserved for litigation.  The sanctions includes remedies and curative measures that are not considered “sanctions,” such as allowing additional discovery, requiring a party to recreate or obtain the information that it lost, or ordering a party to pay reasonable expenses resulting from the loss of information.
  • The court may also impose sanctions listed in Rule 37(b)(2)(A) when to address preservation failures.  These sanctions include issue or evidence preclusion, the striking of pleadings, the dismissal of the action in whole or in part, and an adverse inference.
  • The court may impose sanctions or order an adverse jury instruction only if it finds that the failure to preserve caused “substantial prejudice” in the litigation and was “willful or in bad faith.” or that the failure to preserve “irreparably deprived a party of any meaningful opportunity” to litigate the claims in the action.

 

via On the Cusp of Major Changes to E-Discovery Rules.

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Judicial Ethics and Social Media

On February 21, 2013, the American Bar Association released a formal opinion (#462) regarding judicial ethics in the social media context.  The ABA concluded,

A judge may participate in electronic social networking, but as with all social relationships and contacts, a judge must comply with relevant provisions of the Code of Judicial Conduct and avoid any conduct that would undermine the judge’s independence, integrity, or impartiality, or create an appearance of impartiality.

So what does this mean?

Electronic Social Media and the Judicial Independence, impartiality, and integrity

The ABA recognized that social networking is a part of worldwide culture and that electronic social media interactions might be beneficial to judges in order to prevent them from being thought of as isolated or out of touch.

So how should judges then behave in this electronic environment?  Given the oath and importance of promoting public confidence in the independence, integrity, and impartiality,” the judge must be sensitive to the appearance of relationships with others.

It is important to understand that relations over the internet are difficult to manage because messages may be taken out of context, misinterpreted, or relayed incorrectly.

In other words, judges must assume that comments, images, or profile information, as well as any other information, might be publicly revealed without the judge’s permission.

In addition, judges should not form relationships with persons or organizations that might be violative of Judicial Ethics because these relationships convey that the individuals or organizations are in a position to influence the judge.

Furthermore, there might be disclosure or disqualification concerns regarding judges when the sites that were “friended” or “liked” which are used by lawyers or others who may appear before the judge.  The context is important here when assessing the judge’s relationship to attorneys or others who may appear before them.

Electronic Social Media and Election Campaigns

In the ABA Model Code (which may be adopted as a whole or in part by states), a judge or judicial candidate may engage in political or campaign activity with certain enumerated exceptions.

Of great importance is that judges and judicial candidates must “be free and appear to be free from political influence and political pressure.” ABA Model Rule 4.1 [1].

Similarly of equal importance, the judge or judicial candidate is prohibited from personally soliciting or accepting campaign contributions other than through a campaign committee.  ABA Model Rule 4.1(A)(8); see also ABA Model Rule 4.4.  In the Model Rules, the method of communication is not addressed or restricted.

In addition, judges and judicial candidates are prohibited from “publicly endorsing or opposing a candidate for any public office.” ABA Model Rule 4.1(A)(3).  This means that judges or judicial candidates should be aware that by “liking” or becoming a “fan” of, or by “sharing” messages, photos, or other content, this Model Rule might be violated.

In sum, judges and judicial candidates can use social media but must be aware of the potential pitfalls that might arise. These might arise from “friending,” “liking,” “sharing,” being a “fan” of, and posting comments, photos, or other information that might be distributed.  It is also important for judges and judicial candidates to be aware that any information on the Internet might be distributed by others and made public with or without their consent.

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Lawyer’s misconduct did not prevent class action certification

In a class action, lawyers’ conduct when contacting (or trying to contact) possible putative class members, is regulated by the court or federal statute.

In this case, the 7th Circuit Court of Appeals determined  that class counsel’s faxing of unsolicited advertisement was misconduct.  The decision rested on the question of whether the law firm bribed a third-party in order to obtain a list of the possible putative class members.  Due to a lack of evidence that the payment of $5,000 was a bribe, the court allowed the class to be certified.

I raise this case because it raises the issue of attorney misconduct.  First of all, there are across-the-states ethics rules that govern attorneys’ conduct.  You can access ethics rules governing attorneys by going to the state court’s website and looking for the Board of Professional Responsibility or ethics rules.

As the 7th Circuit Court of Appeals highlighted multiple times, the law firm’s misconduct could possibly warrant disciplinary action.  The Court of Appeals commented that litigants and attorneys should report to the relevant bar authority (the Board of Professional Responsibility) instances of attorney misconduct.  Otherwise, the court warned, unpunished and inappropriate attorney conduct will continue.

In fact, there are ethical rules that discuss the reporting of misconduct.  In Minnesota, Rule 8.3 discusses the reporting of professional misconduct.  Rule 8.3 states, in relevant part,

(a) A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects, shall inform the appropriate professional authority.

Secondly, in a class action, the class representatives through their class counsel must show that the class counsel can appropriately represent the class.  In other words, the court must decide that the law firm can properly represent the entire class (which may in the hundredths).

So, if a law firm possibly engaged in misconduct, i.e. shows a lack of integrity – is the law firm’s representation proper?  The court did state that unethical conduct (regardless of whether it is prejudicial) raises “serious doubt” as to counsel’s ability to adequately represent the class.

via Courthouse News Service.

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Judge Admonished for Comments About Victim’s ‘Technical Rape’ and Lack of Body Shutdown

You may remember the argument, which caused public outrage, over the belief that a body just “shuts down” when a woman is not subjected to real rape.  A judge used this same language in a California case, and was admonished for showing bias – a trait that runs afoul of judicial ethics.  These are the relevant parts of the article published in the ABA Journal News.

Judge Derek Johnson, from Orange County, California, was publicly admonished for saying a sexual assault victim had suffered only a “technical” rape and didn’t display vaginal damage characteristic of rape victims he had encountered as a prosecutor.

Judge Derek Johnson of Orange County had advanced his theory on body shutdowns during rape in a 2008 sentencing hearing, according to the opinion (PDF) by the California Commission on Judicial Performance.  The judicial discipline opinion has a transcript of his explanation why:

Johnson: “I spent my last year and a half in the DA’s office in the sexual assault unit. I know something about sexual assault. I’ve seen sexual assault. I’ve seen women who have been ravaged and savaged whose vagina was shredded by the rape. I’m not a gynecologist, but I can tell you something: If someone doesn’t want to have sexual intercourse, the body shuts down. The body will not permit that to happen unless a lot of damage is inflicted, and we heard nothing about that in this case. That tells me that the victim in this case, although she wasn’t necessarily willing, she didn’t put up a fight. And to treat this case like the rape cases that we all hear about is an insult to victims of rape. I think it’s an insult. I think it trivializes a rape.”

Johnson: “I just found the threats to be technical threats. I found this whole case to be a technical case. The rape is technical. The forced oral copulation is technical. It’s more of a crim law test than a real live criminal case.”

The commission said Johnson’s remarks reflected biased and insensitive views about sexual assault victims who do not “put up a fight.” Johnson had apologized for the remarks to the commission, saying he was frustrated by a sentencing request he considered inappropriate under the law. He remains on the bench.

via Judge Admonished for Comments About Victim’s ‘Technical Rape’ and Lack of Body Shutdown – News – ABA Journal.

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D. Minn Court Holds Defendant in Contempt (ESI)

Multifeeder Tech. Inc. v. British Confectionery Co. Ltd., No. 09-1090 (JRT/TNL), 2012 WL 4135848 (D. Minn. Sept. 18, 2012)

In this case, the Magistrate Judge recommended that an adverse inference be issued, that Defendant be held in contempt and that significant monetary sanctions be imposed upon his determination that two of Defendant’s employees had intentionally spoliated evidence by deleting certain information and by failing to reveal the existence of encrypted data.  Upon the parties’ objections, the District Court adopted in part the Magistrate Judge’s recommendation, but increased the monetary sanctions imposed.

While the details provided in these opinions are somewhat complicated, the bottom line is simple: two of Defendant’s employees were found to have intentionally spoliated evidence.  The spoliation was discovered by a forensic investigator who had been appointed by the court following Plaintiff’s first motion for sanctions.  At the time of that appointment, pursuant to an ESI protocol crafted by the court, the parties were each ordered to bear a portion of the costs of further investigation.

Briefly, the relevant incidents of spoliation included the use of wiping software by Defendant’s Director of Quality Assurance and the deletion of a PST file by the Vice President of Sales and Marketing.  The Magistrate Judge also found that the Vice President’s failure to reveal the existence of encrypted data on his laptop despite an order requiring that Defendant provide the court-appointed forensic investigator with “reasonable access to personnel and facilities,” which encompassed the custodian’s computers, amounted to spoliation:

[He] knew that an encrypted and passwordprotected [sic] volume was installed and in use on his computer, and he failed to provide any notice that such a volume existed.  Encryption software exists so that—without notice and a password—entities like CFS are unlikely to find and access the ESI stored on encrypted volumes.  Thus, the failure to provide any notice of the encrypted volume until November 2011 violated the ESI Protocol Order and amounts to spoliation of evidence.

(CFS was the court-appointed forensic examiner.)

In light of Defendant’s spoliation, the Magistrate Judge recommended that an adverse inference be imposed at trial and that Defendant be held in contempt and required to pay $25,000 to the court and $475,000 to the plaintiff.  The Magistrate Judge’s order took into account Plaintiff’s “reasonable expenses” caused by Defendant’s actions, including the significant fees of the forensic examiner.

Both parties objected.  Upon review, the District Court adopted the recommendations of the Magistrate Judge, in part, but increased the amount of monetary sanctions to be paid to Plaintiff.  The court indicated that the amount was increased for several reasons, including to better compensate Plaintiff for the significant costs of the forensic investigator and its attorneys’ fees and in light of the court’s consideration of other circumstances, such as the “significant prejudice” suffered by Plaintiff (which the District Court determined could not be mitigated to the extent indicated by the Magistrate Judge) and the fact that this was not the first sanctions order in this case.

The District Court largely rejected Defendant’s assertion that Plaintiff was “at least partially responsible” for the investigator’s “ballooning costs” (Plaintiff initially estimated the cost of the investigation would be around $10,000 + travel) and that some portion of the fees were not reasonably attributable to Defendant because of Plaintiff’s failure to timely inform Defendant or the Court that the fees would be far greater than expected.  Despite acknowledging the disparity between the estimated and final cost and that Plaintiff should have disclosed the “exploding” costs sooner, the court ultimately determined that it was largely Defendant’s conduct that resulted in the extensive fees: “It is no fault of Multifeeder that documenting the extent of British’s drive wiping was extremely time consuming.”

Accordingly, the court raised the sanction to $600,000, an amount which “represents reasonable expenses and attorneys’ fees because it encompasses much of CFS’s current unpaid invoices, at least some past paid amounts by Multifeeder to CFS, and reasonable legal fees and expenses in litigating this discovery dispute.”  The court also ordered Defendant to pay the recommended $25,000 to the court.

Indicating its reluctance to modify the previously imposed ESI protocol which ordered Plaintiff to pay a portion of the investigator’s costs, but recognizing that the fees owed could financially devastate Plaintiff absent receipt of the payment ordered from Defendant, the court ordered Defendant to make staggered payments to Plaintiff and that Plaintiff in turn pay the investigator its fees within a time certain.

A copy of the Magistrate Judge’s order is available here, a copy of the District Court’s order is available here.

via For Spoliation, Court Holds Defendant in Contempt, Orders $600,000 to be Paid to Plaintiff, $25,000 to be Paid to the Court : Electronic Discovery Law.

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ABA sanctions law school for false data

Yesterday, the ABA issued sanctions against the University of Illinois College of Law for intentionally reporting and publishing false admissions data.  Specifically, false LSAT scores and incoming student GPA data for the entering classes of 2005, and 2007 to 2011.

The sanctions imposed by the ABA were as follows:

  • Public censure, which must be posted prominently on the home page of the University of Illinois College of Law’s website for a period of 2 years,
  • The requirement that the University of Illinois College of Law issue a public corrective statement to be distributed to all ABA-approved law schools,
  • The requirement that the law school hire a compliance monitor for a period of no less than 2 years,
  • Monetary penalty of $250,000 to be paid by Sept. 15, 2012, and
  • The termination of a section agreement that allowed the law school to conduct an early-admissions program.

 

via ABA Legal Education Section Announces Sanctions Against University of Illinois College of Law – ABANow – ABA Media Relations & Communication Services.

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Ability to Pay considered for sanctions

As an attorney that has dealt with reducing costs for my clients based on ability to pay, it is interesting to see that other courts (9th Circuit Court of Appeals) have applied this same deference in other situations.  In this case, a lawyer was sanctioned by the court, but was unable to pay.

The ABA Journal writes,

Before imposing a financial penalty that a lawyer might not be able to pay, a federal district court can consider the impact on the attorney, a federal appeals court has ruled, giving a California lawyer—who said he made less than $20,000 annually—another chance to make his case for a reduction in a sanction of over $360,000 for pursuing frivolous litigation.

The San Francisco-based 9th U.S. Circuit Court of Appeals said it is remanding the Gregory Melvin Haynes matter because it appears that the district judge who sanctioned him under 28 U.S.C. § 1927 mistakenly thought the court had no discretion to consider the attorney’s financial situation. However, the district court has discretion to do so—just as it has discretion to hold a lawyer accountable, as it did in Haynes’ case, for the opposing side’s litigation costs, explained the appeals court in a Monday opinion (PDF).

Haynes, who had sued the city and county of San Francisco as well as a number of individuals over a psychotic woman’s involuntary hospitalization, engaged in “a wide variety of incompetent and unprofessional actions,” the 9th Circuit noted.

“We now hold that a district court may reduce Sec. 1927 sanctions award in light of an attorney’s inability to pay. Because the district court appeared to believe that it was without discretion to reduce the sanctions award on this ground, and accordingly failed to consider whether to exercise that discretion, we remand for further proceedings,” the appeals court wrote.

It said this is the first time the issue has been considered in the 9th Circuit, which is following the same approach previously adopted by the New York City-based 2nd U.S. Circuit Court of Appeals. The Chicago-based 7th U.S. Circuit Court of Appeals takes a different view of the issue, Trial Insider notes.

“We do not suggest by this holding that when the district court decides to reduce an amount on account of a sanctioned attorney’s inability to pay, it must reduce the amount to that which it determines that the attorney is capable of satisfying,” the opinion continues. “Just as it is within the discretion of the district court to decide whether to reduce the amount at all, the amount to which the sanction will be reduced is equally within the court’s discretion.”

via 9th Circuit Says Court Can Consider Ability to Pay, Orders Rehearing re $360K Attorney Sanction – News – ABA Journal.

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Courts Increasingly Cognizant of eDiscovery Burdens, Reject “Gotcha” Sanctions Demands

Courts are becoming increasingly cognizant of the eDiscovery burdens that the information explosion has placed on organizations. Indeed, the cases from 2012 are piling up in which courts have rejected demands that sanctions be imposed for seemingly reasonable information retention practices. The recent case of Grabenstein v. Arrow Electronics (D. Colo. April 23, 2012) is another notable instance of this trend.

In Grabenstein, the court refused to sanction a company for eliminating emails pursuant to a good faith document retention policy. The plaintiff had argued that drastic sanctions (evidence, adverse inference and monetary) should be imposed on the company since relevant emails regarding her alleged disability were not retained in violation of both its eDiscovery duties and an EEOC regulatory retention obligation. The court disagreed, finding that sanctions were inappropriate because the emails were not deleted before the duty to preserve was triggered: “Plaintiff has not provided any evidence that Defendant deleted e-mails after the litigation hold was imposed.”

Furthermore, the court declined to issue sanctions of any kind even though it found that the company deleted emails in violation of its EEOC regulatory retention duty. The court adopted this seemingly incongruous position because the emails were overwritten pursuant to a reasonable document retention policy:

“there is no evidence to show that the e-mails were destroyed in other than the normal course of business pursuant to Defendant’s e-mail retention policy or that Defendant intended to withhold unfavorable information from Plaintiff.”

The Grabenstein case reinforces the principle that reasonable information retention and eDiscovery processes can and often do trump sanctions requests. Just like the defendant in Grabenstein, organizations should develop and follow a retention policy that eliminates data stockpiles before litigation is reasonably anticipated. Grabenstein also demonstrates the value of deploying a timely and comprehensive litigation hold process to ensure that relevant electronically stored information (ESI) is retained once a preservation duty is triggered. These principles are consistent with various other recent cases, including a decision last month in which pharmaceutical giant Pfizer defeated a sanctions motion by relying on its “good faith business procedures” to eliminate legacy materials before a duty to preserve arose.

The Grabenstein holding also spotlights the role that proportionality can play in determining the extent of a party’s preservation duties. The Grabenstein court reasoned that sanctions would be inappropriate since plaintiff managed to obtain the destroyed emails from an alternative source. Without expressly mentioning “proportionality,” the court implicitly drew on Federal Rule of Civil Procedure 26(b)(2)(C) to reach its “no harm, no foul” approach to plaintiff’s sanctions request. Rule 2626(b)(2)(C)(i) empowers a court to limit discovery when it is “unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Given that plaintiff actually had the emails in question and there was no evidence suggesting other ESI had been destroyed, proportionality standards tipped the scales against the sanctions request.

The Grabenstein holding is good news for organizations looking to reduce their eDiscovery costs and burdens. By refusing to accede to a tenuous sanctions motion and by following principles of proportionality, the court sustained reasonableness over “gotcha” eDiscovery tactics. If courts adhere to the Grabenstein mantra that preservation and production should be reasonable and proportional, organizations truly stand a better chance of seeing their litigation costs and burdens reduced accordingly.

via e-discovery 2.0 » Blog Archive » Courts Increasingly Cognizant of eDiscovery Burdens, Reject “Gotcha” Sanctions Demands.

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