Maggette v. BL Development Corp., 2:07-cv-182, 2009 U.S. Dist. LEXIS 116789 (ND Miss. Nov. 24, 2009) is a straightforward caution to corporations to make sure that litigation hold procedures are transparent and communicated to the court as early as possible. Here, a U.S. Magistrate Judge for the Northern District of Mississippi, openly suspicious of defendants' lack of evidence, orders defendant to pay for the services of a third-party e-discovery expert to answer some very basic questions posed by the court. Procedurally, the court was entertaining plaintiffs' motions to strike and for sanctions. The court declined to order sanctions, but nevertheless takes defendant to task for failing to come forward with what exactly was done to preserve ESI and search ESI in response to plaintiffs' discovery demands. The lack of specificity before the court on the exact efforts used to search ESI lead the court to write:
In this case, the defendants have produced information and affidavits and have stated at the hearing on these motions that they have searched for documents and information responsive to the plaintiffs' discovery requests and produced all information responsive to those requests. Nevertheless, despite the court's direct order that "all defendants . . . search any available databases for responsive information and produce it to the plaintiffs. . . , " the defendants are un-able to describe the databases searched, the search terms, methods or parameters used to search the databases or provide any expert information confirming that there are no documents, electronically stored information or other information responsive to plaintiffs' discovery requests. Docket 177, p. 13. Further, the defendants have not provided any concrete reason or rationale for the numerous discrepancies within their discovery responses and the deposition testimony of their own employees. Nor has defendant articulated a satisfactory response to the court's doubts expressed at the hearing that corporations as large and sophisticated as the defendants, which operate numerous gaming facilities across the country with various operations centers, do not have either paper files, electronic files or information or -- even in light of Hurricane Katrina -- backup measures and files for at least some of the information requested by plaintiffs.
This begins defendants slide down a slippery slope.
Citing to the Zubulake case, the court continued:
A party has a duty to preserve evidence relevant to litigation when the party has notice of the litigation or when it should have known that the evidence may be relevant to future litigation. Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 216 (S.D.N.Y.2003). Spoliation is the "destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in a pending or reasonably foreseeable litigation." Alcoa, 244 F.R.D. at 339 (quoting Zubulake, 220 F.R.D. at 216). A party's preservation obligations are as follows:
"Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a "litigation hold" to ensure the preservation of relevant documents. As a general rule, that litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company's policy. On the other hand, if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes would likely be subject to the litigation hold." Id. (quoting Zubulake, 220 F.R.D. at 218).
There is however, an exception this rule. If a party can identify where par-ticular relevant documents are stored on backup tapes or systems, then the backup tapes or systems storing these key documents should be preserved if the information is not otherwise available. Zubulake, 220 F.R.D. at 218.
In a footnote (no. 2) the court points out:
See Zubulake v. UBS Warburg, LLC, 217 F.R.D. 309 (S.D.N.Y.2003); Zubulake v. UBS Warburg, LLC, 230 F.R.D. 290 (S.D.N.Y. 2003); Zubulake v. UBS Warburg, LLC, 216 F.R.D. 280 (S.D.N.Y.2003); Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212 (S.D.N.Y. 2003); and Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422 (S.D.N.Y. 2004). These decisions have been addressed and further developed in numerous cases since they were decided. They and their progeny make clear that a lackadaisical approach to preservation and production of elec-tronic documents is simply unacceptable in today's litigation world.
With the stage set for its holding the court does not resort to direct sanctions, but requires the hiring of a third-party e-discovery expert to get to the bottom of defendants duty to preserve and produce relevant information:
Although the court cannot say with certainty whether the defendants have legitimately fulfilled their discovery obligations, it does not appear that they have done so. The guiding principle of this court is to reach the truth in any case before it. Accordingly, the court declines to rule on the plaintiffs' motions until it is satisfied that the standards for preservation of electronic evidence and disclosure of all relevant evidence have been met or not met, as the case may be. The court cannot make such a determination without further review by a third party expert in the field of electronic discovery and who has knowledge of the gaming industry.
To aid the court in its decision a third-party expert is needed, and because defendants have failed to satisfy the court's inquiries calculated to determine the legitimacy of their searches to date or whether they have in good faith at-tempted to use preservation techniques reasonably available to them, the costs of the expert will be borne by the defendants. To that end the parties must agree upon a third-party expert in the field of electronic discovery and who has knowledge of the gaming industry to determine whether the defendants have met the standards for preservation of electronic evidence and disclosed all relevant evidence.
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Finally, the defendants will bear all costs of this expert, including any subsequent deposition of the expert by the plaintiffs and any costs associated with the expert testifying before this court.
For a copy of the court's opinion, click here: Download Maggette v BL Development Corp 2009.