First 2014 Update For California E-Discovery Practice Guide

First 2014 Update For California E-Discovery Practice Guide

We have just put the finishing touches on the latest update to the Matthew Bender® Practice Guide:  California E-Discovery and Evidence.  This release adds coverage of important 2013 California legislation and rules changes, as well as recent California and federal cases dealing with e-discovery issues.  

Here are some of the developments covered in this release: 

Enhanced Discussion of Local Rules and Forms 

            Production of Evidence—Los Angeles County Model Stipulation and Protective Order Forms Added.  Model forms for use in connection with stipulations and protective orders in California’s most populous county have been added.  Important local requirements for use of these procedures are included in the official comments to the forms.  

            Motions to Compel—New Discussion of Local Rules and Standing Orders Governing Disputes Concerning ESI .  This release adds coverage of guidelines for meet-and-confer and special procedures implemented by superior courts in several populous counties to expedite the resolution of discovery disputes.

New Legislation 

            Motions to Compel—Time Limit Now Based on Verified Response.  The 45-day time limit for moving to compel further responses to discovery under the Civil Discovery Act begins to run after the receipt of a verified response or supplemental verified response [Stats 2013 ch 18;  see CCP § 2031.310(a),(c)]. 

Recent Rules Changes 

            Electronic Filing—New Local Rules and Requirements.  In June 2013, the California Judicial Council amended the Rules of Court governing electronic filing and service of pleadings and paper.  The amendments authorize all superior courts to implement local rules requiring parties to file documents electronically with the court and serve them electronically on parties to the litigation [CRC 2.250 et seq.].  The rules also clarify that when a litigant uses an electronic filing service provider to serve documents on other parties (as opposed to serving them directly via email) service on the other parties is complete at the time that the electronic filing service provider electronically transmits the document or sends electronic notification of service [Cal Rules Ct, Rule 2.251(h)(1)].  In connection with the changes to the Rules of Court, superior courts in San Francisco, San Diego, Orange, and Contra Costa Counties have either expanded pilot programs or implemented new rules requiring parties to file documents electronically in many civil cases.  This release summarizes the new e-filing requirements in each of these courts.   See Ch. 2, Governing Law in Electronic Discovery, 2.17. 

Recent Judicial Decisions 

            Production Demands—Broadly Worded Request for Financial Data Did Not Put Recipient on Notice to Produce Revenue Documents Broken Down By Product Line.  In Reinsdorf v. Skechers U.S.A., Inc. (CD Cal., July 19, 2013) 2013 U.S. Dist. LEXIS 107631, *29–30 [enhanced opinion available to lexis.com subscribers], the court  denied a motion to reopen discovery and held that a defendant’s production of an entire electronic general ledger that did not break revenues down by product line sufficiently responded to a broad document request for financial data.  The court reasoned that the propounding party should have explicitly asked for the financial data to be broken down by product line if it wanted that information, and admonished the propounding party that, “[r]equests should be reasonably specific, allowing the respondent to readily identify what is wanted. Requests which are worded too broadly or are too all inclusive of a general topic function like a giant broom, sweeping everything in their path, useful or not. They require the respondent either to guess or move through mental gymnastics which are unreasonably time-consuming and burdensome to determine which of many pieces of paper may conceivably contain some detail, either obvious or hidden, within the scope of the request.” See Ch. 6, Demanding Production of Electronically Stored Information in California, 6.11[1][d].

             Production Demands—Forensic Inspection of Plaintiff’s iPhone and Computer Not Warranted In Class Action Litigation Over Text Message Spam.  In Lee v. Stonebridge Life Ins. Co. (ND Cal, July 30, 2013) 2013 U.S. Dist. LEXIS 106654, at *4–6 [enhanced opinion],the court refused to grant the defendant’s motion to compel forensic inspection of the plaintiff’s iPhone and personal computer in a class action alleging that the defendant sent unsolicited text message spam.  Describing a forensic inspection as “an extreme step,” the court held that it could not discern any relevance in forensic imaging of plaintiff’s iPhone given that it was not the iPhone on which she had received the text spam, and plaintiff’s expert had stated that a back-up of plaintiff’s prior iPhone existed on her personal computer.  The court held that the defendant “essentially requests that the Court condone a fishing expedition of plaintiff's personal computer” in light of the fact that the plaintiff had offered to search for and provide the defendant with the information it sought from her computer, and in fact, already had provided the defendant with considerable data including information regarding over 2,500 websites the defendant suggested, incidents where the plaintiff entered her cellular telephone number on a website, and the text message at issue in plaintiff’s complaint.  See Ch. 6, Demanding Production of Electronically Stored Information in California Court, 6.08[2]. 

            Responding to Demand—Defendant Did Not Have To Produce Royalty Statements In Excel Format When It Had Already Produced Them Twice in Other Formats.  In James v. UMG Recordings, Inc. (ND Cal, Nov. 8, 2013) 2013 U.S. Dist. LEXIS 160444, at *8–9 [enhanced op;inion], a class action litigation brought by artists alleging underpayment of licensing royalties on digital downloads of their recordings, the court refused to compel the defendant recording company to produce electronically formatted royalty statements in Excel form.  The recording company argued that it had twice produced the statements dating back to 2003 in other formats, production of electronically formatted royalty statements would require creation of new documents not currently in existence, and would require 40 hours of employee time to produce statements for the 2009 to 2012 period alone.  The court, citing Fed Rules Civ Proc Rule 34(b)(2)(E)(iii)—the federal analog to CCP § 2031.280(d)(2) —denied plaintiffs’ motion to compel.  See Ch. 8, Responding to Electronic Discovery Demands in California Court, 8.09[1]. 

            Production—Litigant Ordered To Conduct Search Using Boolean Logic on Search Terms.  Boolean operators can be applied to keyword searches to further narrow the data collected in much the same way that attorneys formulate requests when searching legal databases.  In Swanson v. Alza Corp. (ND Cal, Oct 7, 2013) 2013 U.S. Dist. LEXIS 145493, at *11 [enhanced opinion], the court rejected the plaintiff’s argument that requiring it to conduct three searches using Boolean operators on keywords was “unprecedented.”  The court noted, “This is actually not the case, and given the availability of technology, Boolean searches will undoubtedly become the standard, if, for no other reason, to limit ESI documents to those most likely to be relevant to pending litigation.”  See Ch. 9, Gathering and Producing Electronically Stored Information, 9.28[6]. 

            Production—Failure to Get Agreement on Limiting Custodians to Search Results in Order to Conduct Further Searches After Gaps in Production Appear.  In Banas v. Volcano Corp. (ND Cal, Oct 4, 2013) 2013 U.S. Dist. LEXIS 144139, at *6 [enhanced opinion], the defendant decided to identify relevant documents by "triangulating" the defendant's employees, but did not discuss this “triangulation” method with plaintiff’s counsel.  When it came to light that there were gaps in defendant’s production, the court granted plaintiff’s motion to compel additional searches of the ESI.  The court stated that while defendant's "triangulation" approach to discovery might have been a reasonable way to gather the relevant documents, it held that in light of the lack of agreement to the manner and method by which the original search was conducted, a further search and production would ensure that the defendant had met its discovery obligations.  See Ch. 9, Gathering and Producing Electronically Stored Information, 9.28[2]. 

            Production—Counsel Ordered to Personally Ensure Adequacy of Client’s Document Production After Searches by Client Did Not Yield Sufficient Results.  In Cefalu v. Holder (ND Cal, Aug. 12, 2013) 2013 U.S. Dist. LEXIS 113485, at *4–5 [enhanced opinion], a lawsuit brought by a former Bureau of Alcohol Tobacco and Firearms agent against his employer, plaintiff’s counsel allowed plaintiff to self-select emails for production.  After multiple meet and confer sessions between plaintiff and defense counsel concerning the adequacy of plaintiff’s email production, plaintiff's counsel agreed to conduct an independent search of plaintiff's email which then yielded more responsive emails than plaintiff’s self-selection search had produced.  Defendant then moved for an order compelling a forensic examination of plaintiff’s computer.  The court denied defendant’s motion, but nevertheless concluded that, “the history of plaintiff's document production . . . suggests that he may not fully understand his search obligations” and ordered plaintiff’s counsel “to ensure that all responsive documents located on plaintiff's personal computer and related electronic devices have been produced.”  See Ch. 9, Gathering and Producing Electronically Stored Information, 9.24[2]. 

            Production—Privilege Log Inadequate When it Failed to Identify Authors and Recipients by Name.  In Viteri-Butler v. Univ. of Cal. (ND Cal Sept 30, 2013) 2013 U.S. Dist. LEXIS 142430, at *19–20 [enhanced opinion], the court held that a defendant’s privilege log was inadequate because it had not adequately identified document authors and recipients by name, stating:  “[a]n appropriate privilege log identifies the author of a document by name, not just by a description of the group of individuals that happens to include the author. Moreover, the [defendant] has not included detail supporting the privileges asserted, such as affirmations that no authorized persons have received the communications described in the privilege log, adequately specified the dates on which documents were prepared and sent to persons other than the document's author, or clearly identified the specific individuals who received those documents.”  See Ch. 9, Gathering and Producing Electronically Stored Information, 9.46[1]. 

            Production—ESI Produced in Hard Copy Printouts When Subpoena Specified .TIFF File Format Accompanied by OCR Text Was Not In “Reasonably Usable Form.”  In Ameritox, LTD. v. Millennium Labs. Clinical Supply, Inc. (SD Cal Oct. 25, 2013) 2013 U.S. Dist. LEXIS 153718, at *14–15 [enhanced opinion], third-party subpoenas specified that the recipient should produce ESI in single page, group IV .tiff file format accompanied by OCR text at the document level.  The recipient of the subpoena instead produced hard copy printouts of the requested ESI.  The party that issued the subpoena moved to compel production of the ESI in electronic format, arguing that the recipient did not comply with its obligation to produce ESI in a reasonably usable form because it “chose to produce the documents in the most time consuming and impractical manner imaginable."  The court granted the subpoenaing party’s motion to compel and ordered the producing party to provide the ESI in the format specified in the subpoena.  See Ch. 9, Gathering and Producing Electronically Stored Information, 9.51. 

            Opposing Production Demands—Conclusory Recitations of Expense and Burden Were Not Sufficiently Specific to Demonstrate Why Requested Discovery Was Objectionable.  In Lindell v. Synthes USA (ED Cal., June 18, 2013) 2013 U.S. Dist. LEXIS 85636, at *20 [enhanced opinion], the defendants in a wage-and-hour class action did not establish that ESI requested by plaintiffs was inaccessible because of undue burden or cost when they submitted no evidence concerning the burden in connection with a 45 page joint statement of items in dispute and, “at oral argument, defendants' counsel waited until the waning moments of the hearing to note that it took one individual three days to assimilate a representative sample for sixteen putative class members."  See Ch. 10, Opposing Demands for Production of Electronic Evidence in California Court, 10.07[2]. 

            Motions to Compel—Proportionality Principle Did Not Justify Compelling Litigant to Produce Financial Information Broken Down by Model Rather Than Product Line.  In Apple Inc. v. Samsung Elecs. Co. (ND Cal, Aug. 14, 2013) 2013 U.S. Dist. LEXIS 116493, at *30 [enhanced opinion], Samsung requested financial reports from Apple.  Apple produced the financial information compiled at the product line level (e.g., iPhone and iPad) rather than the model level (e.g., iPhone 4S, iPhone 5). Apple refused to present more granular financial data, claiming that it does not maintain reports of such data in its ordinary course of business.  Samsung moved to compel production of the financial information at the more granular model level.  The court found that Apple has financial databases it could query to generate at least some of the reports sought by Samsung, but nevertheless refused to compel Apple to produce additional reports.  Citing the proportionality principle of  Fed Rules Civ Proc Rule 26(b)(2)(C), the court reasoned that the financial documents would be of limited value to Samsung because the parties had already submitted their expert damages reports, and Samsung’s experts were “clearly somehow able to apportion the worldwide, product line inclusive data to estimate U.S. and product-specific damages.”  See Ch. 12, Obtaining or Opposing Motion to Compel, 12.21[4]. 

            Sanctions—Monetary and Adverse Inference Sanctions Imposed Against Class Action Plaintiff’s Counsel Who Disobeyed Orders to Allow Inspection of Billing Records on Computer Hard Drive in Connection with Fee Dispute.  In Ellis v. Toshiba America Information Systems, Inc. (2013) 218 CA4th 853, 872, 881 [enhanced opinion], a California appellate court held that it was not an abuse its discretion to impose a monetary sanction of $165,000 against a class plaintiff’s counsel pursuant to CCP § 2023.010(d), (e), (f) and (g) for misuse of the discovery process in a case in which plaintiff’s counsel requested over $24 million in attorney fees in connection with a class settlement valued at $98 million, and then stymied the defendant’s efforts to verify the accuracy of plaintiff’s counsel’s billing records.  Counsel first provided hard copies of her billing records “purporting to show that she worked at a superhuman rate” and then produced a CD with redacted PDF copies of those time records.  She later represented that she had deleted all the original electronic billing records that arguably might have cast doubt on the accuracy of her billing, and then proceeded to disobey two orders of the court to allow the class action defendant to inspect the hard drive of her computer to determine whether any of that electronically stored information survived her destruction of the files.  The superior court also did not abuse its discretion when, acting as the trier of fact, it applied CACI NO. 204 and drew the inference that “the records [that the attorney] never produced would have shown that she devoted less time to this matter than she claims to have spent.”  The court of appeal affirmed the trial court’s grant of attorney’s fee sanctions to the defendant and the denial of class plaintiff’s attorney fee request in its entirety.   See Ch. 13, Seeking or Opposing Sanctions for Noncompliance, 13.08[4] and 13.09[6]. 

            Sanctions—No Duty to Preserve ESI of Retiring Employee Whose Documents Were Destroyed Three Weeks After Contract Litigation Commenced and Was Only Tangentially Related to Issues in Suit.  In AMC Technology, LLC v. CISCO Systems, Inc. (ND Cal 2013) 2013 U.S. Dist. LEXIS 101372, at *10, *12 [enhanced opinion], the court refused to impose an adverse inference sanction on a company involved in a contract dispute that reformatted a retiring employee’s computer laptop hard drive and deleted his email archive pursuant to a company policy 30 days after the employee retired, despite the fact that the destruction took place three weeks after the company was sued.  The employee, a product manager for one of the products at the center of the contract dispute, was not a member of the team that negotiated the contract.  His major involvement with the contract had been to provide sales data to a member of the negotiating team who use the data in preparing a return on investment spreadsheet forecasting sales of the product.  Under these circumstances the court found that the destroyed ESI was only likely to have been tangentially related to the issue of damages.  The court also held that the retired employee was an unlikely candidate to have ESI relevant to the contract, and therefore the duty to preserve his ESI had not arisen at the time the company destroyed it.  See Ch. 13, Seeking or Opposing Sanctions for Noncompliance, 13.04[2]. 

            Sanctions—Wholly Owned Subsidiary Did Not Have Custody or Control Over ESI on Servers Maintained Exclusively by Parent Company.  In Dugan v. Lloyds TSB Bank (ND Cal, Sept. 4, 2013) 2013 U.S. Dist. LEXIS 126369, *9–10 [enhanced opinion], the court held that a wholly-owned subsidiary did not have custody or control over ESI held by its parent corporation, even though the two companies had the exact same 10-member board of directors, the parent company had provided documents and witnesses in the case to support the subsidiary’s defense, and the parent company played a critical role in administering and profiting from the loans at issue in the lawsuit against the subsidiary. The court held that plaintiffs had not provided any evidence that the subsidiary had the legal control to obtain documents on demand from its parent.  The court ruled that the subsidiary need not produce potentially responsive ESI on servers maintained exclusively by the parent, but did have to produce responsive ESI where the subsidiary’s employees had access to documents on a drive or system shared with the parent.  See Ch. 13, Seeking or Opposing Sanctions for Noncompliance, 13.04[4].

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