E-Discovery Practitioners Take Note: Sanctions Won’t End with the New Federal Rules

Over the past few years, the e-discovery law community has debated amendments to the Federal Rules of Civil Procedure to fix—in the words of Jeff Spicoli—bogus e-discovery provisions, including Rule 37(e)’s provisions on sanctions.

On December 1, the 2015 amendments went into effect, introducing Fed. R. Civ. P. 37(e) that will make it more difficult to sanction lawyers and custodians for e-discovery failures. Or will it?

While it’s too soon to tell the total impact the revised rules will have on e-discovery, we need only look to the recent past to see areas that will remain unchanged. Let’s examine a couple of e-discovery cases that demonstrate why—no matter how courts interpret Rule 37(e)e-discovery evildoers can still be sanctioned for their failures.

Case in Point 1: Fumbling Facebook Productions

One of 2015’s more notable e-discovery cases, D.O.H. v. Lake Cent. Sch. Corp., No. 2:11-cv-430 (N.D. Ind.), examines some of the vital issues of the day, including school bullying and what kids put on Facebook.

David Osama Haddad, known in court papers as “D.O.H.,” and his parents sued the Lake Central School Corp., in November 2011, alleging Haddad sustained physical and emotional damages resulting from being bullied by fellow students at Indiana’s Lake Central High School. In the summer of 2012, the school corporation served requests for social media data and audio and visual files of music Haddad had created. The school and Haddad haggled over the production, and—when the parties couldn’t reach an agreement—the court granted in part a motion to compel filed by the school.

In January 2014, the court ordered Haddad to produce a variety of social media data, including profiles, postings, status updates, groups joined, activity streams, and other data in the relevant time period “that reveal, refer, or relate to any emotion, feeling, or mental state, as well as communications that reveal, refer, or relate to events that could reasonably be expected to produce a significant emotion, feeling, or mental state.”

Haddad produced a portion of his Facebook data, but the school objected, arguing Haddad excluded several data types from those requested and had failed to produce a privilege log.

Haddad later supplemented his production with about 85 pages of redacted material, but it still didn’t include all data Facebook allows users to download. Haddad had given his former counsel access to his Facebook account at the beginning of the litigation, and Haddad claimed his former attorney had decided what to produce.

At Haddad’s deposition, counsel for the school district showed him Facebook data he had failed to produce. Haddad admitted he may have deleted some vulgar comments that others had posted shortly after he was allegedly assaulted at school, but said it was before litigation began.

When Haddad’s lawyer left the case, the school district’s counsel began to contact him directly. The school district continued to be dissatisfied by Haddad’s responses, but Haddad said he assumed his former counsel had produced all responsive data. The school district wasn’t buying it and moved for sanctions in August 2014.

Haddad then retained new counsel and proceeded to produce another 1,415 pages of Facebook data. The only problem was that over 1,000 of the pages were redacted completely. The school district argued Haddad, through both his previous and current counsel, had failed to produce as ordered, destroyed data, and failed to produce a privilege log. They sought sanctions—including dismissal of the action—to address the problem.

In deciding whether to sanction Haddad for his—or his lawyers’—misdeeds in e-discovery, the court relied on Fed. R. Civ. P. 37(b)(2), which provides for several types of sanctions for failing to comply with a court order, including striking pleadings, staying proceedings, and the granddaddy of them all: dismissal of the entire suit.

Haddad conceded that he had violated the court’s discovery order by failing to produce his complete Facebook profile, but he blamed his former counsel and cited Second Circuit precedent in Ransmeier v. Mariani, 718 F.3d 64, 71 (2d Cir. 2013), where the court held, “The rule that the sins of the lawyer are visited on the client does not apply in the context of sanctions.”

However, the district court reminded Haddad he was in the Seventh Circuit—not the Second—and noted that both U.S. Supreme Court and Seventh Circuit precedent had held a litigant could, in fact, be held liable for sanctions for his lawyer’s bad acts.

Citing the U.S. Supreme Court’s decision in Link v. Wabash RR. Co., 370 U.S. 626 (1962), the court wrote:

If an attorney’s conduct falls substantially below what is reasonable under the circumstances, the client’s remedy is against the attorney in a suit for malpractice. But keeping this suit alive merely because plaintiff should not be penalized for the omissions of his own attorney would be visiting the sins of plaintiff’s lawyer upon the defendant.

However, all hope was not lost for Haddad. Citing the Seventh Circuit’s opinion in Domanus v. Lewicki, 742 F.3d 290 (7th Cir. 2014), the court said the most severe sanction of dismissal was warranted only for “exceptional misconduct” or when other less severe sanctions were unavailing, adding the court must “weigh not only the straw that finally broke the camel’s back, but all the straws that the recalcitrant party piled over the course of the lawsuit.” Domanus at 301.

Though Haddad managed to avoid a dismissal, he wasn’t off the hook completely.  The court did issue sanctions, ordering Haddad to make a supplemental production and to pay the school district’s reasonable attorney fees and expenses stemming from the discovery dispute.

Case in Point 2: Grounded Ganja

On April 3, 2003, attorney Lee Rohn attempted to board a commercial flight at the Henry E. Rohlsen Airport on the island of St. Croix in the U.S. Virgin Islands, but her high-flying plans were grounded when a Transportation Safety Administration screener discovered marijuana in a tennis shoe in a vacuum-sealed bag in Rohn’s luggage.

Rohn allegedly said the cannabinoid contraband was for her Rastafarian boyfriend in Puerto Rico because his father was dying, but—whether or not the whole thing was an overzealously bogus bust of a marijuana mission of mercy—the incident spawned more than a decade of litigation, including new case law on involuntary dismissals for dilatory discovery.

In addition to criminal proceedings before the U.S. District Court for the District of the Virgin Islands and the U.S. Court of Appeals for the Third Circuit in Virgin Islands v. Rohn, the incident has been the basis for a civil action that has lasted more than a decade, resulting in the recent e-discovery decision in Rohn v. Daily News Publ’g Co., Inc., No. SX-04-CV-158 (V.I. Sup. Ct. Oct. 21, 2015).

About a year after the airport incident, the Virgin Islands Daily News, a local newspaper published by Daily News Publishing Company Inc., ran a series of three articles about Rohn’s alleged weed-in-the-sneaker caper, and Rohn sued for defamation.

Daily News Publishing moved to dismiss, arguing Rohn failed to cooperate in discovery and that she provided no discovery of her own. Rohn countered that the publisher had yet to respond to her discovery requests from 2005 and that dismissal was too severe a sanction.

The discovery delays became long-term when Rohn refused to provide certain discovery, invoking her Fifth Amendment protection from self-incrimination. Daily News Publishing moved for a discovery stay until the conclusion of the criminal proceedings, and the Superior Court of the Virgin Islands granted the stay.

The fun began again five years later when Rohn moved to lift the stay. Once again, Rohn was apparently somewhat less than robust in her participation in discovery, and Daily News Publishing moved to dismiss for failure to prosecute, pursuant to Fed. R. Civ. P. 41(b).

In analyzing whether the case should be dismissed over Rohn’s alleged discovery failures, the court relied on the six-pronged test articulated by the Virgin Islands Supreme Court in Halliday v. Footlocker Specialty Inc., 53 V.I. 505 (V.I. 2010).

The six factors are:

  • the extent of the plaintiff’s personal responsibility;
  • the prejudice to the other parties in the litigation;
  • whether the plaintiff has demonstrated a history of dilatoriness;
  • whether the plaintiff or attorney’s conduct was willful or in bad faith;
  • the effectiveness of sanctions other than dismissal; and
  • the meritoriousness of the plaintiff’s claims.

In a split analysis, the court said the first factor (plaintiff’s personal responsibility) favored dismissal because—as an attorney—Rohn is held to a higher standard than a typical pro se litigant. Also, Rohn isn’t just any lawyer. She serves on the Board of Governors of the American Association for Justice, and even the newspaper she’s suing for defamation referred to her as a “prominent” attorney.

In addition, the court scored the third factor (plaintiff’s history of dilatoriness) for the publisher, and the publisher prevailed on the fourth factor (willfulness or bad faith), noting Rohn had neither cooperated in discovery nor scheduled a Rule 26(f) conference.

On the other side of the judicial analysis scorecard, the second factor (prejudice to other parties) went to Rohn.  Although the court noted the publisher was prejudiced by having to go through the legal proceedings on the motion to dismiss, it held it wasn’t enough to warrant dismissal. In addition, factors five (effectiveness of lesser sanctions) and six (merit of the plaintiff’s claim) went for Rohn.

The court rejected the publisher’s argument that Rohn’s guilty plea on the marijuana charge gutted her claim of defamation, noting that Rohn was claiming libel on facts beyond the article itself.

With a 3-3 tie on the six Halliday factors, Rohn carried the day and avoided a Rule 41(b) dismissal, but the case provides a cautionary tale for e-discovery practitioners and providers.

Why These Cases Matter

In the 2008 Seton Hall Law Review comment, Why Rule 37(e) Does Not Create a New Safe Harbor for Electronic Evidence Spoliation, Gal Davidovitch noted that “the court is sanctioning the party for violating a court order and not specifically for destroying evidence.”

This point is as true under the new rules as ever. Rule 37(e) was amended in an attempt to protect parties from the burdens of over-preservation—not from the burden of complying with court orders.

Thus, the old Rule 37(e) didn’t protect David Osama Hassad from sanctions for failing to produce his Facebook data, nor did it immediately safeguard Lee Rohn from her case almost being thrown out of court—and neither will the revised Rule 37(e). The rules may have changed, but judges have other tools in their judicial toolboxes to address bad behavior in e-discovery.

About David Horrigan

David Horrigan
David Horrigan is kCura’s e-discovery counsel and legal content director. An attorney, law school guest lecturer, e-discovery industry analyst, and award-winning journalist, David has served as counsel at the Entertainment Software Association, reporter and assistant editor at The National Law Journal, and analyst and counsel at 451 Research.

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