Case Law: Green v. Blitz U.S.A., Inc.
Defendant Sanctioned for Unreasonable Discovery Efforts; Required to File Order in Past and Future Lawsuits
Green v. Blitz U.S.A., Inc., 2011 WL 806011 (E.D. Tex. Mar. 1, 2011). In this products liability litigation, the plaintiff sought to re-open the case and requested sanctions alleging the defendant systematically destroyed evidence, failed to produce relevant documents and committed other discovery violations in bad faith. The plaintiff’s counsel uncovered the unproduced documents nearly a year after trial while conducting discovery in a related matter. Analyzing the dispute, the court determined the e-mails not produced were extremely valuable and prejudiced the plaintiff. The court found the defendant’s discovery efforts were unreasonable, as the defendant placed a single employee who was admittedly “as computer literate—illiterate as they get” in charge. Moreover, the defendant did not conduct a search of electronic data, failed to institute a litigation hold, instructed employees numerous times to routinely delete information and rotated its backup tapes repeatedly permanently deleting data. Although the court declined to re-open the case, it ordered the defendant to pay $250,000 in civil contempt sanctions. Additionally, the court imposed a “purging” sanction of $500,000, extinguishable if the defendant furnished a copy of the order to every plaintiff in every lawsuit proceeding against it for the past two years. Finally, the court ordered the defendant to file a copy of the order with its first pleading or filing in all new lawsuits for the next five years.
Data collection is a phase of the discovery process that continues to plague practitioners and corporations alike. Although this topic is often overlooked in many industry events, web seminars and other educational activities (though it has been discussed frequently on this blog: cell phones, social media and defensible data collection processes) the importance of conducting a proper data collection is absolutely paramount to the defensibility of your process.
In Green v. Blitz U.S.A., Inc., the defendant assigned responsibility of the data collection to a manager who later described himself “about as computer…illiterate as they get.” Not exactly a vote of confidence to the court. Indeed, a process can hardly be found defensible and reasonable if an inexperienced person is placed in charge of a process as essential as collection. The court determined that “[a]ny competent electronic discovery effort would have located this email.” The e-mail referenced by the court had the words “Flame Arrester” in the subject line of the e-mail and included the person in charge of collecting documents for discovery. The flame arrester feature of the product in question was the major issue in this case, hence why the court seemed almost baffled that the collection efforts did not include a simple words search for this term in important custodians’ e-mail boxes.
Other glaring issues in this case involved the failure to issue a litigation hold (a topic frequently discussed in conjunction with sanctions based on case law over the past year and a half). Indeed, the defendant actually instructed the employees to routinely delete electronic data, as documented by at least 10 e-mails across a two-year span.
This case demonstrates how absolutely essential it is to have thorough, competent discovery processes and plans in place. In addition, data collection is an area where it is almost always advisable to utilize a third-party expert, who can then testify that the process was completed defensibly if called into question. Implementing a smart discovery strategy now will enable a sound response once a request for ESI is received, or once litigation is reasonably anticipated. These short-term investments will reap long-term gain in terms of helping to avoid sanctions such as the ones imposed in this case.