Finally Some Limitations on E-Discovery?

Here’s two interesting developments that indicate the ongoing expansion of the scope of e-discovery rulings may be starting to recede. First the decision in Preferred Care Partners Holding Corp. v. Humana, Inc., 2009 WL 982460 (S.D. Fla. April 9, 2009) where the court found that the the Fifth Amendment’s Due Process Clause may limit the sanctions imposed for the loss of ESI.

Factually, the court found that one party had, in fact, breached it’s duty to preserve documents but that the sanctions a court may award under Rule 37 should be “reasonable” in light of the circumstances and by reasonable it said that the court must consider effective remedies which are the “least drastic.” Specifically, the court stated that the violation of a discovery order caused by simple negligence or which was due to confusion, a misunderstanding, or the inability to comply with a court’s order does not justify a Rule 37 default judgment or dismissal.

Further, said the court, “To comply with the Due Process Clause, the court must impose sanctions that are both ‘just’ and ‘specifically related to the particular claim’ or defense affected by the misconduct. Thus, for example, if there is no nexus between the information destroyed were not produced and Plaintiff’s claim or Defendant’s defense, it would not be appropriate to enter a default.”

So, in the facts before it, the court found that the decision by Humana’s counsel to print and purge documents “without consulting opposing counsel or advising the Court was an exercise in bad judgment and constituted a breach of Humana’s discovery obligation to preserve evidence relevant to ongoing litigation.” but since the poor decisions “… were neither intentional nor done in bad faith, but rather resulted from the grossly negligent oversights of counsel.” it was not appropriate to order a default.

Instead the court ordered additional discovery and a monetary sanction, including the payment of PCP’s costs and attorneys’ fees arising from that supplemental discovery. The court further ordered that PCP be allowed to conduct a forensic examination of Humana’s backup systems to verify that it maintained copies of all of the purged emails and Humana was ordered to pay the cost of that forensic examination.

Also we recetnly read a  Texas Laywer article   that described a case argued before the Texas Supreme Court where it was asked to consider arguments about how much electronic discovery should be allowed by trial courts. The issue is apparently a case of first impression: Can a trial court order one litigant in a civil suit to provide a court-appointed computer forensic expert access to its computer hard drives for mirror imaging and searching, if the opposing side pays the costs?  Questioning by the justices centered on specific aspects of the FRCP rules, including the meet and confer and what discovery was agreed upon by the parties.

It seems that as the amount of electronically-stored data continues to grows exponentiallyperhaps the judicial inclination to similarly expand the scope of examination of that data and sanctions for failure to do so is beginning to slow down somewhat.


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