e-Discovery Docket Sheet

In a patent-infringement claim, the defendant filed a motion to compel electronic documents from the plaintiff in their native-file format with complete metadata, instead of in the already produced .TIFF format. The defendant argued that it was entitled to an entire electronic database of documents in its natural state, but the plaintiff argued that there was no particular need for the native files. Agreeing with the plaintiff, the court found that the parties did not agree to produce native files at the prediscovery conference. The court also noted that the defendant could not show a need for the native-file documents. The court used Delaware's Default Standard for Electronic Discovery as authority and stated that if parties cannot agree to a file format before discovery occurs, then imaged files will be the default format. The plaintiff also argued in favor of shifting half the discovery costs to the defendant, which included imaging a large volume of documents for a litigation database. The court denied the cost-shifting claim because the defendant 'is not the only party benefiting [sic] from the organization of these documents' into the database. It held that the plaintiff was 'also a beneficiary of its imaged files' and that it was not equitable to force the defendant to pay for the electronic organization of the opposing party's database. Wyeth v. Impax Lab. Inc., 2006 WL 3091331 (D. Del. Oct. 26, 2006).

In a misappropriation of trade secrets matter, the defendant compelled the court to order the production of inaccessible e-mails from more than 400 backup tapes that the plaintiff held. The plaintiff objected because the production would require an undue burden and cost, and would not likely uncover any probative e-mail evidence. The court examined five factors using a straightforward application of North Carolina Rule 26. It also noted that the Guidelines from the Conference of Chief Justices would provide the proper legal guidance for e-discovery issues. The court analyzed and balanced the following factors: 1) the burden and expense of production; 2) the needs of the case; 3) the amount in controversy; 4) any limitations on the parties' resources; and 5) the importance of the issues at stake. The court found that the potential for discovery of probative evidence was 'too great to deny Defendants' motion' and that the inquiry might uncover evidence central to the defendants' case. However, the court noted that the discovery costs were unknown, and reserved the right to re-examine any cost-shifting issues until the plaintiff determined the final costs. The court required the parties to equally split the costs of restoration. Analog Devices Inc. v. Michalski, 2006 WL 3287382 (N.C. Super. Nov. 1, 2006). (Note: This case is the companion case to Bank of Amer. Corp. v. SR Int'l Bus. Ins. Co., 2006 WL 3093174 (N.C. Super. Nov. 1, 2006), which the court filed concurrently.)

The defendants sought deleted e-mails from 400 backup tapes of Marsh Inc., a broker of the plaintiff and non-party to the litigation. Marsh previously produced more than 50,000 e-mail documents for the litigation but the defendants argued that all relevant e-mails may not have been produced. Marsh argued, as a non-party, that the defendant's request would impose an undue burden and expense. Marsh's expert stated that such recovery and organization could cost as much as $1.4 million. The defendants argued that Marsh may have produced only e-mails responsive to the subpoena, and none that related to the claims and defenses of the case. The court denied the defendant's motion because 'such a low level of marginal utility does not justify imposing a heavy burden on a nonparty ' nonparties should not be penalized for having a backup system by making them produce inaccessible backup data without good cause.' The court also found no evidence that Marsh had failed to produce responsive documents or that the requested e-mails would show anything contrary to the e-mails already produced. Bank of Amer. Corp. v. SR Int'l Bus. Ins. Co., 2006 WL 3093174 (N.C. Super. Nov. 1, 2006). (Note: The court listed this as the companion case to Analog Devices Inc. v. Michalski, 2006 WL 3287382 (N.C. Super. Nov. 1, 2006), which was filed concurrently by the court.)

In a copyright-infringement matter, the plaintiffs alleged that a Napster investor willfully deleted relevant e-mail so that the court should issue an adverse inference instruction and default judgment on some of the claims. The investor argued that it did not have a duty to preserve the e-mails in question because they were not a named party to any Napster litigation at the time, nor did they reasonably expect to be a part of any litigation related to Napster. The court disagreed and determined that the president of the company knew prior to the commencement of this litigation, and that parties involved could be named as a party in the suit and be required to produce documents. Although the court did not find that the investor had willfully destroyed e-mail, it determined that it was grossly deficient in its attempt to preserve any evidence. Default judgment was not ordered; however, adverse inferences and monetary sanctions were awarded. In Re Napster, Inc. Copyright Litigation, 2006 WL 3050864 (N.D. Cal. Oct. 25, 2006).

Court Refuses To Order Native Format Production

In a patent-infringement claim, the defendant filed a motion to compel electronic documents from the plaintiff in their native-file format with complete metadata, instead of in the already produced .TIFF format. The defendant argued that it was entitled to an entire electronic database of documents in its natural state, but the plaintiff argued that there was no particular need for the native files. Agreeing with the plaintiff, the court found that the parties did not agree to produce native files at the prediscovery conference. The court also noted that the defendant could not show a need for the native-file documents. The court used Delaware's Default Standard for Electronic Discovery as authority and stated that if parties cannot agree to a file format before discovery occurs, then imaged files will be the default format. The plaintiff also argued in favor of shifting half the discovery costs to the defendant, which included imaging a large volume of documents for a litigation database. The court denied the cost-shifting claim because the defendant 'is not the only party benefiting [sic] from the organization of these documents' into the database. It held that the plaintiff was 'also a beneficiary of its imaged files' and that it was not equitable to force the defendant to pay for the electronic organization of the opposing party's database. Wyeth v. Impax Lab. Inc., 2006 WL 3091331 (D. Del. Oct. 26, 2006).

In a misappropriation of trade secrets matter, the defendant compelled the court to order the production of inaccessible e-mails from more than 400 backup tapes that the plaintiff held. The plaintiff objected because the production would require an undue burden and cost, and would not likely uncover any probative e-mail evidence. The court examined five factors using a straightforward application of North Carolina Rule 26. It also noted that the Guidelines from the Conference of Chief Justices would provide the proper legal guidance for e-discovery issues. The court analyzed and balanced the following factors: 1) the burden and expense of production; 2) the needs of the case; 3) the amount in controversy; 4) any limitations on the parties' resources; and 5) the importance of the issues at stake. The court found that the potential for discovery of probative evidence was 'too great to deny Defendants' motion' and that the inquiry might uncover evidence central to the defendants' case. However, the court noted that the discovery costs were unknown, and reserved the right to re-examine any cost-shifting issues until the plaintiff determined the final costs. The court required the parties to equally split the costs of restoration. Analog Devices Inc. v. Michalski, 2006 WL 3287382 (N.C. Super. Nov. 1, 2006). (Note: This case is the companion case to Bank of Amer. Corp. v. SR Int'l Bus. Ins. Co., 2006 WL 3093174 (N.C. Super. Nov. 1, 2006), which the court filed concurrently.)

The defendants sought deleted e-mails from 400 backup tapes of Marsh Inc., a broker of the plaintiff and non-party to the litigation. Marsh previously produced more than 50,000 e-mail documents for the litigation but the defendants argued that all relevant e-mails may not have been produced. Marsh argued, as a non-party, that the defendant's request would impose an undue burden and expense. Marsh's expert stated that such recovery and organization could cost as much as $1.4 million. The defendants argued that Marsh may have produced only e-mails responsive to the subpoena, and none that related to the claims and defenses of the case. The court denied the defendant's motion because 'such a low level of marginal utility does not justify imposing a heavy burden on a nonparty ' nonparties should not be penalized for having a backup system by making them produce inaccessible backup data without good cause.' The court also found no evidence that Marsh had failed to produce responsive documents or that the requested e-mails would show anything contrary to the e-mails already produced. Bank of Amer. Corp. v. SR Int'l Bus. Ins. Co., 2006 WL 3093174 (N.C. Super. Nov. 1, 2006). (Note: The court listed this as the companion case to Analog Devices Inc. v. Michalski, 2006 WL 3287382 (N.C. Super. Nov. 1, 2006), which was filed concurrently by the court.)

In a copyright-infringement matter, the plaintiffs alleged that a Napster investor willfully deleted relevant e-mail so that the court should issue an adverse inference instruction and default judgment on some of the claims. The investor argued that it did not have a duty to preserve the e-mails in question because they were not a named party to any Napster litigation at the time, nor did they reasonably expect to be a part of any litigation related to Napster. The court disagreed and determined that the president of the company knew prior to the commencement of this litigation, and that parties involved could be named as a party in the suit and be required to produce documents. Although the court did not find that the investor had willfully destroyed e-mail, it determined that it was grossly deficient in its attempt to preserve any evidence. Default judgment was not ordered; however, adverse inferences and monetary sanctions were awarded. In Re Napster, Inc. Copyright Litigation, 2006 WL 3050864 (N.D. Cal. Oct. 25, 2006).