We saw this post at http://it-lex.org/judge-calls-companys-ediscovery-policies-clearly-unacceptable-orders-further-depositions/, and felt compelled to repeat it here (again).
The factual specifics of Scentsy, Inc. v. B.R. Chase, LLC are relatively unimportant, but a recent order [PDF] addresses eDiscovery concerns and reiterates a point that has been made on this site countless times before. Co-defendant Harmony Brands, LLC claimed that plaintiffs had failed to produce enough key documents, and alleged that this was due to an insufficient litigation hold policy. When your opposing counsel is suggesting that your eDiscovery procedures are lacking, it’s probably worth listening. Accordingly, prior to this hearing, Harmony asked
the Court to compel Scentsy to conduct a forensic exam of its own computer systems at its own expense to retrieve any deleted discoverable data, or to order other appropriate sanctions.
The Court makes the point that timing is a key consideration when talking about spoliation, and observes that the dates and the time-frames here at a little unclear as to when litigation was reasonably foreseeable and when particular documents were deleted. The rule for sanctions is that
a court may not impose sanctions… on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system
and so there has to be a finding of bad faith from Scentsy before any sanctions can be imposed. Speaking about the apparent state of Scentsy’s policies:
Generally not deleting documents, and orally requesting certain employees to preserve relevant documents concurrently with filing a lawsuit, is completely inadequate. It is very risky – to such an extent that it borders on recklessness.
Though speaking “generally”, that comment seemed fairly particular to this party. To make that point clearer, the Court declared that
Scentsy’s document retention and litigation hold policies are clearly unacceptable.
Ultimately, the Order allowed Harmony to depose Scentsy employees on the particular subject of whether documents were destroyed. The Court withheld sanctions in this Order, but suggested that, depending on what comes up in these depositions, the window would be open in the future. An adverse inference at trial, or the dismissal of some of Scentsy’s counterclaims are possible sanctions to look out for as this case progresses.