The State of eDiscovery in Delaware, Pt. III
In Part II of this series, we looked at four cases from 2002 and 2003 in which the Court of Chancery and the District Court each got into the eDiscovery thicket, addressing issues with backup tape restoration, keyword searching, allegations of spoliation, and cost-shifting. The next significant case isn’t until 2004 when the Superior Court steps back into the eDiscovery realm.
In late 2004, the Superior Court faces instant messaging issues in Smoot v. Comcast Cablevision, 2004 WL 2914287 (Nov. 16, 2004). Smoot was fired by Comcast for engaging in a “four-hour ‘instant message’ conversation with two of her co-workers on her company laptop. The conversation included numerous sexual references and allusions as well as racially derogatory remarks and instances of profanity.” Smoot applied for unemployment benefits and was denied. She appealed to an Appeals Referee who upheld the denial of benefits. She then appealed to the Unemployment Insurance Appeal Board who also upheld the denial. She then appealed to Superior Court. The Court affirmed the Board’s decision. Comcast caught Smoot because the instant message conversation created a 24-page transcript on her company-owned laptop. This case shows us that ESI isn’t just Word documents and emails; it’s created in myriad ways.
In early 2005, in Beck v. Atlantic Coast PLC, 868 A.2d 840 (Feb. 11, 2005), the Court of Chancery sanctioned plaintiff and plaintiff’s counsel for failure to disclose relevant material from the plaintiff’s web site. In an attempted class action, Beck sought to be class representative in a suit against Atlantic Coast for breach of warranty and fraud related to Atlantic Coast’s software. Unfortunately, Beck never purchased or used the software at the heart of the allegation. Atlantic Coast’s counsel found Beck’s web site where he posted his belief that the software did not work and emails exchanged with the developer in which he posed as potential buyer. The Court dismissed the case with prejudice and ordered Beck and his counsel to pay Atlantic Coast $25,000 and $2,500 to the Court. This is comparatively minor in a post-Qualcomm world, but significant at the time. As the case above, this case also expanded the horizon of discoverable ESI.
Less than a month later, in TIG Insurance Company v. Premier Parks, Inc., 2005 WL 468300 (Mar. 1, 2005), the Superior Court reconsiders its own discovery order after misapprehending just how difficult it is to find needles in haystacks of ESI. TIG insured Premier Parks (“Six Flags”) who was being sued in a class action. The Court ordered TIG to produce information regarding law firms it had chosen to defend class actions against other insureds over the previous five years. TIG tried to comply but had no way to sort by matters which resulted in defending a certified class action so they proposed searching for matters with similar expenditure levels (more than $750,000). Six Flags rejected that proposal. TIG proposed to broaden the search to matters with $500,000 in expenditures. Six Flags again rejected, and proposed sending its expert in to TIG’s systems to search for the information. TIG filed for reargument, asking the Court to refine its discovery order. Six Flags, using language very similar to the Court’s in Kinko’s, argued that “TIG may not use its inadequate computer system as an excuse to avoid valid discovery obligations.” The Superior Court did not agree and amended its prior order to require TIG to search its system for matters with $500,000 in expenditures. This is an excellent example of a court employing the principle of proportionality, principle number two of The Sedona Principles.
In the fall of 2005, in Rockwell Automation, Inc. v. Kall, 2005 WL 2266592 (Sept. 9, 2005), the Court of Chancery deals with commingled personal and proprietary data. The defendant had been terminated by the plaintiff. The plaintiff sought recovery of proprietary materials in defendant’s possession. Defendant returned “computer hardware” to the plaintiff containing the proprietary materials and defendant’s personal and privileged information. The Court ordered that plaintiff “retain, at its expense, a third-party service provider to retrieve and review all documents.” The service provider was to identify plaintiff’s proprietary or confidential documents from the corpus and return them to plaintiff. The Court did not provide any guidance on what method the service provider should use to find plaintiff’s proprietary or confidential documents.
We’ll finish up 2005 in Part IV. In the meantime, if you know of significant Delaware eDiscovery cases from 2005 that you think I should have included, please post a comment to let everyone know. If you do it soon enough, you may make it into the next post!
