Five Significant eDiscovery Rulings from 2021
- 9 mins
At the beginning of every new year, it is important for legal teams to reflect on key eDiscovery case law from the year before that will influence future processes and case strategy. In 2021, the U.S. courts handled a variety of eDiscovery issues – some were variations or progressions of topics debated in the past while others involved new obstacles stemming from emerging technologies. Key themes included aligning sanctions with the realities of emerging technology, continuing focus on proportionality, the pandemic’s influence on eDiscovery protocols, increased attention to Federal Rule of Evidence (FRE) 502(d) disputes, and analyzing hyperlinks in the context of eDiscovery production mandates.
Here are five of the most interesting cases from 2021 and some major takeaways to guide similar eDiscovery obstacles in the future.
Federal Trade Commission v. Vyera Pharmaceuticals, LLC. S.D.N.Y. June 1, 2021
The main issue was whether deleted text messages warranted sanctions. During discovery, it became clear that a key custodian of Defendant pharmaceutical company was a former employee that was subsequently incarcerated. He kept the company phone after departure and transferred it to his family upon incarceration. Plaintiffs discovered that the phone was wiped in 2016-2017 and therefore they were unable to obtain any data. There was also a contraband phone involved where an executive of Defendant’s company chatted with the former employee about matters relevant to the case via WhatsApp. This data was no longer available, as WhatsApp automatically deleted the messages.
Plaintiffs asked for spoliation sanctions in the form of an adverse inference. The court granted the motion as to the contraband phone. Through testimony of Defendant’s executive, plaintiff established that the custodian discussed relevant business matters on this phone and knew WhatsApp would not preserve the data. Because the plaintiffs did not offer any evidence illustrating the failure to preserve relevant evidence on the company phone, the judge did not allow sanctions in that instance.
The major lesson from this case is that when evaluating sanctions courts are accounting for unique features of emerging technologies – especially when a platform enables surreptitious behavior. Additionally, to be successful on a motion for sanctions parties must put forth evidence that establishes the deleted or hidden communication existed. This can be difficult with ephemeral messaging apps that are designed to delete data after a certain time (often instantaneously). More courts are seeing this behavior and it is of the utmost importance that litigators can prove destructive actions occurred that interfered with eDiscovery – whether it be through witness testimony or other evidence documenting that the party communicated over another platform known for not preserving chats.
D'Agostin v. Fitness International, LLC D. Conn. May 12, 2021
The central issue here was defining proportional eDiscovery limitations regarding timeframe and geography. This was a slip and fall case at an LA Fitness gym locker room where plaintiff made an eDiscovery request for information on similar accidents occurring at nationwide locations during the previous five years. Defendants challenged this as lacking proportionality, and the magistrate judge ordered the parties to meet-and-confer to narrow the request. The parties could not agree – plaintiff narrowed down to four states over five years, but defendants stood firm on only producing information from the state where the accident happened over three years. The judge agreed with plaintiff’s reduced request and the defendant filed an objection with the district court, citing disproportionality due to facility differences in other states. The court overruled the objection with one caveat, which was to clarify that production only applied to incidents occurring in tile areas of a locker room. The judge found the reduced request proportional because it cut out over 600 facilities that the prior request encompassed. Also, that LA Fitness locations in other states had similar tiled areas to the incident at hand to establish constructive notice of dangerous conditions.
The main takeaways from this case are two-fold. First, this is one case of many from last year where the court prioritized proportionality. The potential for eDiscovery to blow litigation budgets and delay proceedings is high as the data generated daily continues to multiply. This has caused courts across the nation to spend more time analyzing proportionality disputes and limiting scope to control costs and manage time when possible. Second, while narrowing production requests is a standard eDiscovery dispute that is fact-dependent, the initial pivot to counsel cooperation illustrates the continuing trend starting well before 2021 of courts wanting parties to solve proportionality issues outside court whenever possible. This is also a cost and time saving tool allowing both parties to get what they need without wasting judicial resources on unnecessary motion practice.
Berkeley*ieor v. Teradata Operations, Inc. No. 17 C 7472 (N.D. Ill. Aug. 12, 2021)
Plaintiff filed a motion to compel various discovery processes – one being live deposition attendance requiring air travel. Due to personal scheduling conflicts, the attorneys demanded that the witness deposition occur on two days a week apart. This would mean that opposing counsel (located in Chicago) would have to fly out to California on two separate occasions to complete the deposition. The judge denied this motion and ordered it to be held remotely due to the ongoing risks imposed by the pandemic and lack of cooperation surrounding the notion that defense counsel should take two costly trips to complete the deposition. Plaintiff counsel’s argument that the deposition needed to be live and assertions that the pandemic conditions had improved did not sway the judge, who commented that remote depositions have flourished for many years and physical presence of counsel is not always needed to ascertain truth or achieve justice.
The major takeaway from this decision goes deeper than the obvious conclusion that courts will grant ongoing flexibility during times of great uncertainty, such as a pandemic. It also illustrates the trend of courts allowing and embracing virtual processes as the norm, which has been accelerated the last two years due to necessity. In the short-term, litigators should expect and embrace flexibility when dealing with traditional in-person events that can be accomplished remotely – especially when dealing with significant travel. Looking past the pandemic, it is also safe to anticipate that courts will continue to allow for remote discovery processes more often – especially those that reduce costs and streamline case resolutions.
Klein, et al. v. Facebook No.: 20-cv-08570-LHK (N.D. Cal. June 3, 2021)
This matter involved resolution of several disputes stemming from FRE 502(d), which authorizes a party to proactively request a court order preventing privilege waiver when disclosure occurs. A central issue was whether to apply the order only to inadvertent disclosures of privileged information. While some district courts have done this, the judge here did not since the rule does not apply any such restriction. The judge instead mandated that the order include the maximum protection under Rule 502(d), which at face value blanketly applies to all types of disclosures. The judge also made sure to explicitly include that Rule 502(b) does not apply here, which is the default test when parties do not enter a 502(d) privilege protection order.
Parties have historically shied away from Rule 502(d) even though it offers widespread protection. For many, this is likely due to being uninformed about the rule’s reach. Courts have begun to dive into some of the rule’s nuances and last August, the Sedona Conference released commentary on why these orders should be standard practice in federal proceedings. The major takeaway here is that litigators should expect to see more Rule 502(d) activity this year both in general practice and around issue splits - like application scope or parameters around clawback notices. As Klein noted, no appellate court has yet weighed in on the inadvertent disclosure vs. blanket application debate. Future rulings by higher courts in this space will be very instructive.
Nichols v. Noom, Inc. No. 20-CV-3677 (LGS) (KHP) (S.D.N.Y. Mar. 11, 2021)
This decision centered on the issue of whether courts should view hyperlinks as attachments for the purposes of eDiscovery production. The parties agreed to use Google Vault to collect data in their ESI protocol. Upon review, plaintiffs discovered that a common practice was to include hyperlinks to internal files instead of physically attaching documents to emails. They motioned the court to compel defendants to use an outside vendor who could recollect hyperlinks as part of the document family, as Google Vault did not have this capability. The magistrate judge denied the motion, finding extra costs and delays as disproportionate to the case and ordering plaintiffs to alternatively request from defendants any specific hyperlink documents not already produced.
What makes this decision intriguing is how the judge elaborated on the discussion of viewing hyperlinks as synonymous to physical document attachments. The judge recognized that including hyperlinks over physical attachments is now a common practice. However, she concluded they cannot be the same because a hyperlink will not always link to relevant information to a case, but a physical attachment would because it acts as an extension of the conversation. One example given was when someone hyperlinks contact information. She also commented on how the parties did not specifically mention hyperlinks in their ESI protocol. The district court upheld this decision but did not comment on the substance of the ruling, which leaves the door wide open for future opinions.
The major takeaway from this case is that for now, hyperlinks are not universally accepted as attachments. As courts get more technical education, there is a good chance this stance will change just as how other eDiscovery matters involving new communication preferences have evolved throughout the years. Future considerations will likely be around balancing the burden on receiving parties to associate separate documents to hyperlinks when determining if the production is missing key hyperlink data. Also expect future discussion on whether hyperlinks operate as modern attachments, since many jump to a relevant document stored internally on a cloud platform. This data would be relevant to production in numerous instances and demand unique collection efforts. Another takeaway from this case is the importance of protocol language. If the protocol clearly mentioned hyperlinks, the judge may have ruled differently. So, until the stance on the hyperlink debate solidifies a way to ensure proper production would be to reference modern attachments such as hyperlinks in the ESI protocol.
The topics covered in the above cases will evolve in 2022, as many deal with the modern issues associated with changing technology usage and remote processes. This includes eDiscovery disputes surrounding hyperlinks and other modern attachments that still require significant court intervention to solidify stances. Litigators should also pay close attention to new decisions involving Rule 502(d), as the recent commentary by Sedona Conference may spark increased adoption of this rule which will inevitably accelerate ambiguity issues to the courts.
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