ESI in the Criminal Context: A Call for Clarification

Posted on November 16, 2011 by Calli Varner

Although the Federal Rules of Civil Procedure set the stage for electronic discovery in civil cases, there is no such express regime in the criminal context. 

The absence of such a standard became evident in a recent case in the Western District of New York.  In United States v. Briggs, 2011 WL 4017886 (W.D.N.Y. Sept. 8, 2011), defendants were charged with several counts related to the distribution of cocaine.  The criminal investigation leading to these charges involved court-authorized interceptions of cellular telephone communications indicating that the defendants were allegedly engaged in drug trafficking. 

In its voluntary discovery, the Government furnished defense counsel with disks containing thousands of pages of documents relating to these communications using the IPRO program routinely used by the U.S. Attorney’s Office in cases involving multiple defendants.  Defendants claimed this reported data had problems with omissions and inaccuracies resulting from the collection and management system used. The defendants also objected to the Government’s failure to provide the data in the “most useful form that is readily available” and claimed the “.tiff” files received could not be sorted or searched.  The appropriate format, according to the defendants, was either the “.pdf” or native format.  The Government, in response, refused to provide the files in these formats arguing that the cost of reproduction was prohibitive, that it had already produced the particular data requested by defendants, and that it should not bear the burden of reproduction merely because it would be more helpful or useful to the defendants. 

Examining this issue, the court began by pointing out the absence of a standard in criminal cases for the production of ESI.  While Rule 16(d)(1) of the Federal Rules of Criminal Procedure, the general authority ordering the manner of production in criminal cases, provides that, “[a]t any time the court may, for good cause, deny, restrict, or defer discovery or inspection, or grant other appropriate relief,”  it does not specify the manner in which such production should be made.  The court, therefore, turned to two other jurisdictions addressing criminal prosecutions involving extensive document production.  In United States v. O’Keefe, 537 F. Supp. 2d 14 (D.D.C. 2008), the United States District Court of the District of Columbia, conceded that there was no  criminal equivalent to, and, thus, applied, Federal Rule of Civil Procedure 34.  In United States v. Warshak, 631 F.3d 266 (6th Cir. 2010), the Sixth Circuit refused to require the Government to reproduce electronic materials in the format requested by the defendant because the defendants had ready access to the information and documents as they were kept in the usual course of business.

Applying these rules, the court determined that the Government was the party “better able to bear the burden of organizing these records for over twenty defendants in a manner useful to all.”  The court mandated that the Government must reproduce its disclosure in a searchable format (PDF), or in the native format.  The court based its decision on the rationale that the Government is in the better position to organize the mass of information in a manner that is searchable by the defense because: (1) the Government already compiled this electronic information from its various native forms into a common electronic database and; (2) rather than have each defendant compile the data involving that party or repeat the expense of reproducing the entire Government production, the Government should bear this burden.  In making this decision, the court made it clear that it was not adopting Rule 34 of the Federal Rules of Civil Procedure in all criminal cases, as in O’Keefe, rather it was applying it in only this case.    

Briggs is a clear example of the need for a more uniform regime for ESI in criminal cases.  According to the court, the Justice Department appears to have at least one working group considering the “best practices” for ESI in criminal cases.  Until then, each court faced with a motion to compel criminal discovery with ESI data will have to devise its own scheme for ESI discovery based on the limited rules governing the criminal context at this time.  Defendants, then, are best advised to be prepared and willing to seek the court’s involvement early on to ensure that the production of ESI is reasonable, proportionate, and manageable so as not to cripple their efforts in defending against criminal liability. 

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Document Preservation: Spoliation and the "Ultimate Sanction"

Posted on November 14, 2011 by Diana Lin

The proper preservation of electronic data for discovery has become an increasing source of contention between parties. Two recent cases illustrate the importance of mindfully preserving electronic data during discovery. 

In Gentex Corp. v. Sutter, No. 3:07-CV-1269, 2011 U.S. Dist. LEXIS 122831 (M.D. Pa. Oct. 24, 2011), the district court granted default judgment to the plaintiffs in a spoliation action. Gentex Corporation sued two of its former employees, Brad Sutter and Patrick Walko, for violating non-disclosure agreements. Gentex claimed that Sutter and Walko copied proprietary files when they left the company and shared them with a rival company, Armor. 

In response to the suit, Armor implemented a litigation hold and instructed employees to preserve “all paper documents and electronically stored information concerning the Company’s relationship with Brad Sutter and his work while at the Company.” Armor also obtained a consulting firm to help preserve documents relevant to the litigation. 

Sutter, however, began destroying evidence despite knowledge of the litigation hold. Sutter scrubbed his computer, explaining that he did so “because he was scared because Gentex had sued him.” Sutter destroyed all CD-ROMs containing Gentex information that he possessed and purposely destroyed a thumb drive after his deposition. Sutter also deleted numerous email messages when he was printing them for production to Gentex. 

Similarly, Walko knowingly deleted documents relating to Gentex files on his computer. Walko claimed that various supervisors, including Sutter, instructed him, “Do what you have to do to clean up. If you need to clean up, clean up.” 

Gentex’s expert concluded that the deletions were “intentional and coordinated and designed to circumvent the duty to preserve documents.” The district court agreed and found that Gentex had presented sufficient evidence to show that Sutter and Walko engaged in willful spoliation. The court ultimately determined that granting default judgment to Gentex was the “least onerous” sanction corresponding to the willfulness of the spoliation, given Sutter and Walko’s “unabashedly intentional destruction of relevant, irretrievable evidence.”

By contrast, another court facing similar facts refused to levy the ultimate sanction. In Cedar Rapids Lodge & Suites, LLC v. JFS Dev., Inc., No. C09-0175, 2011 U.S. Dist. LEXIS 110671 (N.D. Iowa Sept. 27, 2011), the court determined that “a stronger showing of bad faith [was] required” before it would grant default judgment to the plaintiffs. In that case, plaintiff investors sued the developers of a proposed hotel for fraudulent inducement. Following a protracted discovery dispute, plaintiffs sought default judgment against one of the defendants for failure to comply with discovery requests and for intentional destruction of evidence. 

The defendant previously produced seven computers, ten hard drives, and 23 CDs for inspection and copying. Although the plaintiffs’ expert extracted over 34,000 relevant documents from these sources, the expert concluded that external drives that had been connected to the laptop were missing. Additionally, the expert contended that a large number of relevant documents, folders, files, and emails had been targeted for strategic deletion. The expert, however, conceded that several innocent explanations existed for the deletions and missing drives. 

Citing an Eighth Circuit decision, the district court determined that there was no proof that the defendant intentionally engaged in spoliation. As an initial matter, the court seemed impressed by the sheer volume of documents that plaintiffs had already recovered from the defendants. The defendant had initially produced 875 documents followed by an additional 2,700 pages, not to mention the 34,000 documents extracted from various hard drives and computers. 

Additionally, the court found that plaintiffs had not met the relevant legal standard. To warrant any sanction, much less a default judgment, the court had to find: 1) intentional destruction indicative of a desire to suppress the truth; and 2) actual prejudice to the other party resulting from the spoliation. Here, the court deemed the defendant to be merely “unsophisticated in the requirements of litigation and preservation of documents” rather than willfully destructive. Further, the plaintiffs suffered no prejudice, as “[i]t would seem that Plaintiffs have plenty of information upon which to pursue their claims.” In denying the motion for sanctions, the court simply stated, “I believe a stronger showing of bad faith is required.” 

While a default judgment represents the ultimate sanction in spoliation cases, destruction of electronic evidence can result in sanctions running the gamut from claim dismissal and suppression of evidence to an adverse inference and attorneys’ fees and costs. As the district court judge in Gentex observed, “I am especially conscious of the deterrence value of harsh sanctions in cases like this where the crucial evidence exists in electronic form, and a party may destroy its opponent’s case with the mere click of a button.” These two cases teach us to beware the fine line that distinguishes behavior worthy of a default judgment and behavior that is merely vexatious.

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