In a case brought by a stock analyst against one of the companies he covered for defamation, the defendant, as is common, rejected the plaintiff’s suggestion of a stipulated preservation order on the grounds that it was fully aware of its preservation obligations and that such an order was unnecessary given the modest scope of the case. The district court judge commented that “Such reasoning is shortsighted. Even litigation that concerns ‘relatively precise issues, statements and timeframes’ may nevertheless involve information, including electronic documents, that may be in danger of destruction in the absence of a preservation order. Further, a preservation order protects the producing party by defining clearly the extent of its obligations. In the absence of such an order, that party runs the risk of future sanctions if discoverable information is lost because it has miscalculated.” Having said that, the court then acknowledged that the issuance of a protective order is, on the other hand, by no means “automatic” even in a complex case. The court then reviewed the existing standards, and noted that several courts have taken the position that a party seeking a preservation order must meet the standards for obtaining injunctive relief. This approach, however, puts the “cart before the horse” by asking the court to evaluate the merits in advance. Some courts, therefore, have adopted a three-factor balancing test: (1) the level of concern that the court has for the continuing existence and maintenance of the integrity of the evidence in question in the absence of an order directing preservation of the evidence; (2) any irreparable harm likely to result to the party seeking the preservation of evidence absent an order directing preservation; and (3) the capability of an individual, entity, or party to maintain the evidence sought to be preserved, not only as to the evidence’s original form, condition, or contents, but also the physical, spatial and financial burdens created by ordering evidence preservation. Other courts, finally, had opted for a more streamlined approach that simply “requires that one seeking a preservation order demonstrate that it is necessary and not unduly burdensome.” After noting that the distinction between the 2-part test and the 3-part test was “more apparent than real”, the court followed the three-part balancing test, and denied the motion as premature. The court then addressed the issue of the defendant’s obligation to respond to Plaintiff’s Document Retention Questionnaire, which, the court found, should be treated as Rule 33 Interrogatories, and should be answered, despite the 25 limit. Finally, the court addressed the appropriate scope of production. When it received the requests, the defendant suggested defining the scope of review of electronic records by stipulating which files would be searched and what search terms would be utilized. The plaintiff declined, apparently believing that “the use of search terms has no application to the standard discovery process of locating and producing accessible hard copy and electronic documents.” The court noted that the plaintiff’s assumption is flawed, as “even in a case involving exclusively hard copy documents, there is no obligation on the part of a responding party to examine every scrap of paper in its potentially voluminous files in order to comply with its discovery obligations. Rather, it must conduct a diligent search, which… might, for example, include identifying key employees and reviewing any of their files that are likely to be relevant to the claims in the litigation.” The court further noted that it was “a missed opportunity,” as the plaintiff “might have convinced Biovail to broaden its search in ways that would uncover more responsive documents and avoid subsequent disputes. Yet the plaintiff’s recalcitrance does not excuse Biovail’s failure to produce any responsive documents whatsoever. Biovail suggested a strategy by which it would search the computer files of Mr. Melnyk, Mr. Cancellara, and Kenneth Howling, its director of investor relations, using the search terms: (i) Treppel, (ii) Jerry, (iii) Bank of America, (iv) Banc of America, (v) BAS, and (vi) BofA. Absent agreement with Mr. Treppel about a search strategy, Biovail should have proceeded unilaterally, producing all responsive documents located by its search.” In addition, the court ordered the defendant to “provide the plaintiff with a detailed explanation of the search protocol it implements.” Treppel v. Biovail Corp. 233 F.R.D. 363 (S.D.N.Y. 2006).
0 Comments