Court Compels Forensic Imaging of Custodian Computer, Imposes Sanctions Due to Non-Defensible eDiscovery Preservation Process

HealthPlan Servs., Inc. v. Dixit, et al., 2019 WL 6910139 (M.D. Fla. Dec. 19, 2019), is an important eDiscovery case addressing what is required and expected from organizations to comply with electronic evidence discovery collection requirements. In this copyright infringement and breach of contract case, a Federal Magistrate Judge granted the plaintiff’s motion to compel immediate inspection of a defendant employee Feron Kutsomarkos’s laptop after the defendants failed to properly preserve and collect evidence from her. The Court granted plaintiff’s motion to compel the forensic examination, which set forth specific improprieties in their opponent’s ESI preservation process. The Court also granted the plaintiff’s motion for fees, sanctions, and a punitive jury instruction.

 

There are several key takeaways from this case. Here are the top 5:

  1. Custodian Self-Collection Is Not Defensible

Ms. Kutsomarkos conducted her own search of the emails rather than having an expert or trained IT or legal staff overseen by her attorney perform the search. The court found this process to not be defensible as the production “should have come from a professional search of the laptop” instead. This is yet another case disapproving of this faulty practice. For instance, another company found themselves on the wrong end of a $3 million sanctions penalty for spoliation of evidence because they improperly relied on custodians to search and collect Federal Court their own data. See GN Netcom, Inc. v. Plantronics, Inc., No. 12-1318-LPS, 2016 U.S. Dist. LEXIS 93299 (D. Del. July 12, 2016). Even with effective monitoring, severe defensibility concerns plague custodian self-collection, with several courts disapproving of the practice due to poor compliance and inconsistency of results. See Green v. Blitz, 2011 WL 806011, (E.D. Tex. Mar. 1, 2011), Nat’l Day Laborer Org. v. U.S. Immigration and Customs Enforcement Agency, 2012 WL 2878130 (S.D.N.Y. July 13, 2012).

  1. Producing Party Expected to Produce Their Own Data in a Defensible Manner

When responding to a litigation discovery request, the producing party is afforded the opportunity to produce their own data. However, the process must be defensible with a requisite degree of transparency and validation. When an organization does not have a systematic and repeatable process in place, the risks and costs associated with eDiscovery increase exponentially.  Good attorneys and the eDiscovery professionals who work with them will not only ensure their client complies with their own eDiscovery requirements, but will also scrutinize the opponent’s process and gain a critical advantage when the opponent fails to meet their obligations.

And that is what happened here. The corporate defendants had no real process other than telling key custodians to search and collect their own data. The eDiscovery-savvy plaintiff counsel filed motions poking large holes in the defendant’s process and won a likely case-deciding ruling. The stakes are high in such litigation matters and it is incumbent upon counsel to have a high degree of eDiscovery competence for both defensive and offensive purposes.

  1. Forensic Imaging is The Exception, Not the Rule

The court compelled the forensic imaging of a defendant’s laptop, but only as a punitive measure after determining bad faith non-compliance. Section 8c of The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, provides that: “Forensic data collection requires intrusive access to desktop, server, laptop, or other hard drives or media storage devices.”  While noting the practice is acceptable in some limited circumstances, “making a forensic copy of computers is only the first step of an expensive, complex, and difficult process of data analysis . . . it should not be required unless circumstances specifically warrant the additional cost and burden and there is no less burdensome option available.”  The duty to preserve evidence, including ESI, extends only to relevant information. Parties that comply with discovery requirements will avoid burdensome and risk-laden forensic imaging.

  1. Metadata Must be Preserved

Metadata is required to be produced intact when designated by the requesting party, which is now commonplace. (See, Federal Rule of Civil Procedure 34(b)(1)(C)). Metadata is often relevant evidence itself and is also needed for accurate eDiscovery culling, processing and analysis. In her production, counsel for defendant Kutsomarkos provided pdf versions of documents from her laptop. However, the court found that “the pdf files scrubbed the metadata from the documents and that metadata should be available on the hard drives.” There are defensible and very cost effective ways to collect and preserve metadata. They were not used by the defendants, to their great detriment.

  1. A Defensible But Streamlined Process Is Optimal

HealthPlan Services, is yet another court decision underscoring the importance of a well-designed, cost-effective and defensible eDiscovery collection process. Such a capability is only attainable with the right enterprise technology. With X1 Distributed Discovery (X1DD), parties can perform targeted search and collection of the ESI of hundreds of endpoints over the internal network without disrupting operations. The search results are returned in minutes, not weeks, and thus can be highly granular and iterative, based upon multiple keywords, date ranges, file types, or other parameters. This approach typically reduces the eDiscovery collection and processing costs by at least one order of magnitude (90%), thereby bringing much needed feasibility to enterprise-wide eDiscovery collection that can save organizations millions while improving compliance by maintaining metadata, generating audit logs and establishing chain of custody.

And in line with concepts outlined in HealthPlan Services, X1DD provides a repeatable, verifiable and documented process for the requisite defensibility. For a demonstration or briefing on X1 Distributed Discovery, please contact us.