The law firm of Gibson Dunn has just published their mid-year Electronic Discovery and Information Law Update and pointed out some interesting trends. The report can be viewed here.
From the Gibson Dunn report:
Of the 103 opinions Gibson Dunn analyzed, litigants sought sanctions in 30% (or 31)–compared to 42% in all of 2009–and received sanctions in 68% of those cases (or 21)–compared to 70% in all of 2009.
Courts have continued to impose monetary sanctions on outside counsel for failing to adequately supervise a client’s collection and preservation of electronically stored information (“ESI”). In re A&M Florida Properties, the court sanctioned both the client and its outside attorney, noting that although neither had acted in bad faith, sanctions were appropriate because outside counsel “simply did not understand the technical depths to which electronic discovery can sometimes go.”
Similarly, in Wilson v. Thorn Energy, LLC, No. 08 Civ. 9009 (FM), 2010 WL 1712236 (S.D.N.Y. Mar. 15, 2010) (Maas, Mag. J.), the court imposed an adverse inference sanction for gross negligence where the defendants had lost all data relevant to a large transaction when a USB drive was erased. Id. at *3. The Wilson decision declined to apply the protections of Federal Rule of Civil Procedure 37(e), which provides a “safe harbor” “for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system,” as the erasure occurred outside of any routine document management procedures. Id.
Based on these findings, sanctions for eDiscovery failures are still rising and the courts are holding outside counsel responsible for the discovery practices of their clients.
The Wilson v. Thorn Energy case is interesting for the fact that the responsive data in question was stored entirely on a “USB Thumb drive” with no backup. This brings up the question; what is an acceptable procedure for securing responsive or potentially responsive ESI? Is dumping it to a legal department share drive enough? How about storing it solely on a backup tape? How about putting it on an attorney’s laptop hard disk? The main question that I will address in the next blog post is; What do you need to do to ensure the ESI will be available later on?