Sanctions

  • Justice
    Legal Updates

    Court Orders Spoliation Sanctions Requiring Defendants and Former Defense Counsel To Pay Attorneys’ Fees and Costs

    In DR Distributors LLC v. 21 Century Smoking, Inc, v. CB Distributors, Inc. and Carlos Bengos, 2021 WL 185082, No. 12 CV 50324 (1/19/2021), Judge Johnston of the Northern District of Illinois, granted Plaintiff’s motion for sanctions against Defendants and their former counsel, requiring them to, among other things, pay what was expected to exceed a million dollars of attorneys’ fees and costs to Plaintiff. The Court imposed the sanctions based on its conclusion that Defendants and their former counsel: did not take reasonable steps to preserve ESI (electronically stored information); did not conduct a reasonable investigation of their ESI; did not timely disclose ESI under 26(g); and spoliated thousands of emails and chat messages. This ruling shows that we, as legal practitioners, need to be extremely congizant of our discovery obligations.

  • Shifting Costs
    Legal Updates

    Shifting Costs for Responding to Subpoenas Under FRCP 45

    Generally speaking, the presumption is that third parties will bear at least some of the costs of complying with proper subpoenas. That said, Courts often expect that a requesting party will negotiate in good faith the costs of compliance and, if those costs are significant, the requesting party would agree to cover at least some of the costs or limit its requests in light of the requirement of FRCP 45(d)(2)(B)(ii). As demonstrated by a recent case, though FRCP 45 provides two avenues for a third party to recover its costs for responding to a subpoena in federal litigation, such awards are the exception to the rule.

  • When Good Business Sense Doesn’t Make Good Legal Sense
    Legal Updates

    When Good Business Sense Doesn’t Make Good Legal Sense

    In my role as a Senior E-Discovery Attorney, I often provide guidance to organizations in how to develop and implement policies governing data retention and disposition. When developing those policies, it is critical to consider both the business and legal implications of preserving or deleting data and, ideally, find a balance between the two even when the concerns and priorities may not be the same. A recent case highlights what often proves to be a fundamental tension between the perspective of business stakeholders and legal stakeholders with respect to the preservation of ESI for pending or reasonably anticipated litigation in large corporations.

  • Purple Rain
    Legal Updates

    It’s Purple Raining Sanctions: Litigation Regarding Prince’s Estate Provides Framework for Determining When Sanctions Apply Under FRCP Rule 37(e)

    You may have read my colleague Starling Underwood’s post on two recent Second Circuit decisions discussing sanctions for spoliation. If you have not, I encourage you to read it here.  In this post, and continuing our music-themed sanction discussions, I narrow the focus to Federal Rule of Civil Procedure Rule 37(e), which is used to determine whether and what sanctions are appropriate when ESI spoliation occurs. A recent decision from the Minnesota District Court involving the estate of the artist Prince Rodgers Nelson (“Prince”), Paisley Park Enterprises, Inc. v. Boxill, provides a detailed review of the sanctions analysis under Rule 37(e), while dealing with a category of very common ESI data often at issue in litigation today –  mobile phone text messages.

  • Sanctions
    Legal Updates

    Discovery Sanctions in the Second Circuit: Be Afraid, Be Very Afraid

    Two of the most compelling discovery sanction cases of the past year are Klipsch Group., Inc. v. ePRO E-Commerce Ltd. and Ronnie Van Zant, Inc. v. Pyle, both decided in the Second Circuit. In the first, the court awarded $2.68 million in discovery sanctions in a case valued at a mere $20,000. In the second, the court issued an adverse inference when a defendant failed to preserve text messages held by a non-party. The implications of both decisions appear far-reaching and critically important for those involved in the discovery process.