May’s Notable Cases and Events in E-Discovery

This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

1. an order from the U.S. District Court for the District of Maryland denying a motion in limine to exclude from trial all evidence relating to an email that was produced only as a forwarded copy (as well as an alleged attachment to that email) finding that Plaintiff had satisfied the prima facie showing required under Fed. R. Evid. 901 to submit the issue of the document’s authenticity to the jury
2. a ruling from the U.S. District Court for the District of Nebraska finding that a narrowly tailored connectivity analysis of one Defendant’s electronic devices conducted by an expert, as opposed to compelling production of a full forensic mirror image of the devices, was proportional to the needs of the case for purposes of determining whether the devices contained evidence that trade secrets were misappropriated from Plaintiff’s devices
3. a decision from the U.S. District Court for the Southern District of New York finding that a corporate Defendant did not have possession, custody, or control over the personal Google accounts of one of its employees who lived in China, where Plaintiff did not address international laws on the issue of control or otherwise demonstrate that Defendant had the “practical ability” to coerce the employee into complying with a request for the personal account
4. an opinion from the U.S. District Court for the Southern District of Ohio denying a motion to quash a subpoena to one Defendant’s former counsel seeking production of any litigation hold notice that had been issued to the Defendant, finding that Plaintiff had met its burden of making a preliminary showing of spoliation sufficient to require production

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1. An order from the U.S. District Court for the District of Maryland denying a motion in limine to exclude from trial all evidence relating to an email that was produced only as a forwarded copy (as well as an alleged attachment to that email) finding that Plaintiff had satisfied the prima facie showing required under Fed. R. Evid. 901 to submit the issue of the document’s authenticity to the jury.

In Boshea v. Compass Marketing, Inc., No. ELH-21-309, 2023 WL 2743333 (D. Md. Mar. 31, 2023), U.S. District Judge Ellen L. Hollander addressed the authenticity and admissibility of evidence related to an email and attachment where only a forwarded copy of the original email without the attachment was produced in discovery.

In this action by an individual against his former employer seeking severance pay pursuant to an alleged employment agreement, the parties “vigorously contested” whether the employment agreement was ever executed. Id. at *1-2. Although Plaintiff contended that the agreement was signed by Defendant’s chief executive officer, John White, Defendant disputed that White ever signed the agreement. Id. at *2.

In response to a subpoena to John White’s brother, Daniel White, Daniel produced an email that Daniel had forwarded to another brother, Michael White, on May 22, 2007, at 2:08 a.m., which included an original email from John White to Plaintiff at 1:24 a.m. on May 22, 2007, attaching an unsigned draft of the employment agreement at issue. Id. at *3. Daniel White testified that he received the original email from John White to Plaintiff by blind copy, but had “no specific recollection [of] receiving the email.” Daniel White also testified that the original email did not appear in his inbox by itself, only as part of the thread that he forwarded to Michael White.

Defendant filed a motion in limine to exclude from trial all evidence relating to the forwarded email and the purported employment agreement attached to it. Defendant argued that “no one has ever been able to produce the 1:24 am email” allegedly sent by John White to Plaintiff, or the draft agreement allegedly attached, and that “no person who purports to be a party to the alleged email is able to authenticate the alleged email.” Id. at *5. Plaintiff responded that Daniel White and Michael White could authenticate the email and the attachment, and that they both “still maintain the email through their online providers.”

Judge Hollander began her analysis by explaining that the purpose of a motion in limine is “to aid the trial process by enabling the Court to rule in advance of trial on the relevance of certain forecasted evidence” and to “rule in advance on the admissibility of documentary or testimonial evidence and thus expedite and render efficient a subsequent trial.” Id. at *4. She further noted that the court may defer an issue for trial or make a definitive or final ruling on the merits, but that “courts should grant a motion in limine only when the evidence is clearly inadmissible on all potential grounds.” Judge Hollander further explained that she had “wide discretion in determining the admissibility of evidence” under the Federal Rules of Evidence. Id. at *5.

Judge Hollander next addressed the rules relating to authentication under Fed. R. Evid. 901, which governs authentication of documentary or tangible evidence and provides that “the proponent of an item of evidence ... must authenticate the item by producing evidence sufficient to support a finding that the item is what the proponent claims it is.” She noted that “the burden to authenticate under Rule 901 is not high” and that a proponent need only present “evidence sufficient to support a finding that the matter in question is what the proponent claims.” A document may be authenticated under Rule 901(b)(1) through testimony of a witness with knowledge, or under 901(b)(4) by its “appearance, contents, substance, internal patterns, or other distinctive characteristics, taken together with all the circumstances.”

Judge Hollander referred to a prior case, Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 546 (D. Md. 2007), to explain that determining whether electronically stored information (ESI) is authentic “is a two-step process,” involving first determining whether its proponent has offered a satisfactory foundation from which the jury could reasonably find that the evidence is authentic, and second, “because authentication is essentially a question of conditional relevancy, the jury ultimately resolves whether evidence admitted for its consideration is that which the proponent claims.” Id. at *5-6 (quoting Lorraine). She further explained that “the question for the court under Rule 901 is whether the proponent of the evidence has offered a foundation from which the jury could reasonably find that the evidence is what the proponent says it is.” In other words, the court need not find that the evidence is necessarily what the proponent claims, but only that there is sufficient evidence that the jury ultimately might do so. Id. at *6 (quoting Lorraine).

Judge Hollander found that Plaintiff had satisfied the prima facie showing required under Fed. R. Evid. 901 and denied Defendant’s motion to exclude the forwarded email and attachment. She found that Daniel White, a witness with knowledge, stated that he helped Plaintiff find the email, that he was blind copied on the original email, and that he denied making any alterations in the email. Id. at *6. She also found that there was “no evidence to suggest that the email is not authentic.”

Judge Hollander declined to find that the email was inadmissible because Daniel White has no specific recollection of receiving it, explaining that “given that the email was allegedly disseminated over a decade ago, it would be surprising if Daniel [White] had remembered receiving it.” She noted that at best, this raised a question about the weight the jury should place on the email and attachment. Ultimately, she concluded that “[i]t is not the Court’s obligation to determine whether the [email] is what plaintiff says it is, but rather whether there is sufficient evidence for a jury to decide that issue.”

2. A ruling from the U.S. District Court for the District of Nebraska finding that a narrowly tailored connectivity analysis of one Defendant’s electronic devices conducted by an expert, as opposed to compelling production of a full forensic mirror image of the devices, was proportional to the needs of the case for purposes of determining whether the devices contained evidence that trade secrets were misappropriated from Plaintiff’s devices.

In TK Elevator Corp. v. Abels, No. 21-cv-3116, 2022 WL 17551765 (D. Neb. Dec. 9, 2022), U.S. Magistrate Judge Cheryl R. Zwart addressed whether a full forensic inspection of all electronic devices used by a former employee was proportional to the needs of the case, where Plaintiff claimed the inspection was necessary to determine whether a USB device was used to misappropriate Plaintiff’s ESI or whether a more narrow connectivity analysis would suffice.

In this action for theft of trade secrets and violation of an employment agreement, Plaintiff requested an order compelling Defendants to produce certain relevant devices used by Defendant Bret Abels to a neutral third-party examiner for forensic examination and search. As described by Magistrate Judge Zwart, Plaintiff sought a “mirror image” of these devices, “generally described as a forensic duplicate, which replicates bit for bit sector for sector, all allocated and unallocated space, including slack space, on a computer hard drive.” Id. at *10.

Magistrate Judge Zwart began her analysis of this issue with a discussion of the proportionality factors inherent in Federal Rules of Civil Procedure 34 and 26. But she noted that Rule 34(a) does not give the requesting party the right to search through all of the responding party’s records, and that Rule 26(b)(1) allows for discovery of nonprivileged and relevant matter that is proportional to the needs of the case. 

Magistrate Judge Zwart stated that “[c]ourts start from the position that granting a forensic inspection of an opponent’s electronic storage device is highly intrusive” and that “skepticism concerning whether a party has produced all responsive, nonprivileged material from the target electronic devices is not a sufficient reason, standing alone, to warrant production” of a device. But she explained that there can be justifications for the production, including in cases where the device itself and the possible discovery of electronic data about its use is relevant to the claims and defenses in the suit or where there are discrepancies or inconsistencies in the responding party’s discovery responses.

In this case, Defendant had searched Abels’ devices during discovery, but Plaintiff sought to independently verify the response and search the devices for additional information. In particular, Plaintiff claimed that its confidential information may have been removed from its own devices via a USB device and then used by Defendants, and that a forensic inspection of Defendants’ devices would either prove or disprove that theory.

Magistrate Judge Zwart ultimately concluded that permitting a forensic inspection of the devices was not proportional. Id. at *11. She first noted that Plaintiff had identified only four documents that were allegedly misappropriated. In this regard, she found that an inspection of Abels’ personal and company-issued devices (including mobile devices, electronic data storage devices, computers, file-hosting services, and email accounts) was “extremely broad.” She further found that the proposed search would be “intrusive, costly, time-consuming, and encompass documents well beyond the scope of this lawsuit” and would require “deduplication, a review by counsel for irrelevant and privileged information and information which must be labeled confidential or attorney’s eyes only pursuant to the parties’ protective orders.” She concluded that the “facts asserted do not justify the type of sweeping search proposed.”

However, Magistrate Judge Zwart noted that a more limited search was justified based on “certain concerning inconsistencies in the facts as presented,” including that there was inconsistent evidence as to whether Abels had a personal cell phone, personal computer, USB drive, Dropbox account, or personal email address.

Specifically, Magistrate Judge Zwart ordered that a USB connectivity analysis be conducted on Abels’ personal and company-issued devices, assuming that Plaintiff could “provide the serial number of the USB device allegedly used to access” the computer Plaintiff had issued to Abels when he worked for Plaintiff. Id. at *12. She noted that a forensic inspection of Abels’ devices would determine whether the USB device plugged into the computer Plaintiff had issued to Abels was used to transfer files to Defendants’ devices. Magistrate Judge Zwart explained that the connectivity analysis was a more “narrowly tailored approach which will provide the information” Plaintiff sought, that is, whether the USB inserted into Plaintiff’s device was retained and could have been used by Abels to access Plaintiff’s documents after he left Plaintiff’s employ. She therefore ordered the connectivity analysis to be conducted promptly and that the parties should notify the court if further inspection of devices was required after the narrow connectivity analysis was completed.

3. A decision from the U.S. District Court for the Southern District of New York finding that a corporate Defendant did not have possession, custody, or control over the personal Google accounts of one of its employees who lived in China, where Plaintiff did not address international laws on the issue of control or otherwise demonstrate that Defendant had the “practical ability” to coerce the employee into complying with a request for the personal account.

In Owen v. Elastos Foundation, 19-CV-5462 (GHW) (BCM), 2023 WL 2537287 (S.D.N.Y. Mar. 16, 2023), U.S. Magistrate Judge Barbara Moses addressed whether the Defendant’s company had “control” over an employee’s personal Google account for discovery purposes, where the employee lived and worked in China.

This case involved a dispute as to whether Defendants were required to search the Google/Gmail account of its director of operations and a member of its board of directors, Ben Li, who was not himself a defendant. Id. at *1. Li used two different Google accounts, one account with an address associated with Defendant Elastos and one that Defendants characterized as Li’s personal Google account. The Elastos account was searched in connection with this action, but his personal account was not. Defendants produced more than 30,000 documents from Li’s files, including from his laptop, phone, and personal WeChat account, but Li refused to allow Defendants to search his personal Google account.

Discovery showed that Li received emails concerning a personal investment at his company account and forwarded them to his personal account, and on another occasion had received an email concerning Elastos business at his personal email address, which he forwarded to his company account.

When Plaintiffs requested that Defendants search Li’s personal account, Defendants maintained that the account was outside Defendants’ possession, custody, or control. Plaintiffs moved to compel Defendants to access that account, search it (using the parties’ previously agreed-on search terms), and either “produce all responsive documents or a report as to the volume and search hits of recoverable documents.” 

Magistrate Judge Moses noted that the parties’ dispute presented two questions: (1) whether Li’s personal Google account was within the “control” of defendant Elastos such that Elastos could be ordered to search it and produce any relevant contents, and (2) if so, whether the discovery sought would be disproportional to the needs of the case. Id. at *2.

As to the question of “control,” Magistrate Judge Moses explained that documents are considered “under a party’s control when that party has the right, authority, or practical ability to obtain the documents from a non-party to the action.” Id. (collecting cases). She noted that the criteria for determining whether a corporate party has the “practical ability” to obtain relevant documents from a nonparty officer, director, or employee include whether the corporation could discharge the individual for failure to cooperate in discovery; whether the individual has a duty, under local law, to turn over the documents on request; whether the corporate party previously secured the individual’s cooperation in discovery; and “whether the party has asked the non-party to turn over the documents at issue and, if so, whether the non-party is willing to do so.”

Magistrate Judge Moses stated that Plaintiffs had the burden of demonstrating that Defendants had the practical ability to obtain documents from Li, but found that Plaintiffs had not met that burden. She explained “[i]n most American jurisdictions, the first two factors [whether the corporation could discharge the individual for failure to cooperate in discovery; whether the individual has a duty, under local law, to turn over the documents on request] weigh heavily in favor of a finding of ‘control,’” but “the landscape is less settled abroad.” Magistrate Judge Moses noted that while Elastos is registered in Singapore, has its primary offices in Shanghai and Beijing, China, and Li works in China, Plaintiffs did not address either Singaporean or Chinese law on the question of “control.” She concluded that she was not willing to assume that Elastos had the same “practical ability” to coerce compliance from Li that a U.S. corporation would have with respect to documents in the physical or electronic possession of its officers, directors, or employees. She further noted Defendants representations that Elastos had no polices that would give it control over data on the personal devices of its employees.

Magistrate Judge Moses further relied on the fact that, although Li cooperated with discovery by, among other actions, turning over his laptop and phone to be searched and sitting for a deposition, Defendants represented that Li refused multiple requests for access to his personal accounts for collection and search. Id. at *3.

Finally, Magistrate Judge Moses concluded that Plaintiffs had failed to show that Li used his personal Google account to conduct Elastos business, based on one instance where Li received an Elastos business document via his personal email account — but promptly forwarded it to his Elastos Google account. She distinguished this from prior cases where directors had no company-issued email accounts and therefore used outside email accounts or cases where employees testified that they used their personal accounts for various business purposes.

4. An opinion from the U.S. District Court for the Southern District of Ohio denying a motion to quash a subpoena to one Defendant’s former counsel seeking production of any litigation hold notice that had been issued to the Defendant, finding that Plaintiff had met its burden of making a preliminary showing of spoliation sufficient to require production.

In, Safelite Group, Inc. v. Nathaniel Lockridge, et al., No. 21-cv-04558, 2022 WL 17842945 (S.D. Ohio Dec. 22, 2022), U.S. Magistrate Judge Elizabeth A. Preston Deavers addressed whether to quash on privilege grounds a subpoena request directed to one Defendant’s former attorney seeking production of a litigation hold notice.

Plaintiff, an auto glass and repair and replacement company, brought this action against a competitor and certain of its former employees alleging misappropriation of trade secrets and interference with its employment contracts and business relationships. Id. at *1.

Plaintiff had filed a different litigation against one of its former employees, William Billingsley, on September 14, 2021, and Billingsley had retained Robert Wood, a Texas attorney, to represent him in that action. But Plaintiff later dismissed that litigation and amended its complaint in this action to name Billingsley as a defendant. Plaintiff provided Wood with a copy of the then-operative complaint in this action on December 1, 2021, and Wood advised Billingsley via email that Billingsley had been named as a defendant. Id. at *2. On either December 22 or December 24, 2021, Billingsley had “an initial conversation” with Gil Gradisar, who became his counsel in this action.

During discovery, Billingsley testified that he had deleted documents from his personal email account after January 7, 2022, despite being advised by his counsel on December 24, 2021, to preserve all documents in his possession relative to his employment with Plaintiff. Billingsley claimed to have told his counsel that his emails were set to delete after 30 days, but that “all relevant documents had been printed out and preserved.” Billingsley also claimed to have retained the services of a cybersecurity contractor to search for any lost or deleted texts, which were then provided to his counsel.

Plaintiff later claimed to have discovered evidence of spoliation when another defendant produced a relevant email thread involving Billingsley’s personal email account, but which had not been produced by Billingsley. Plaintiff then issued a subpoena to Wood seeking his communications with Billingsley about his preservation obligations and any litigation hold notice in connection with Plaintiff’s lawsuits, including a copy of the litigation hold notice (if one existed) provided by Wood to Billingsley. Id. at *3. Billingsley moved to quash the subpoena.

Magistrate Judge Deavers began her analysis with a brief discussion of Rule 45 of the Federal Rules of Civil Procedure governing subpoenas, noting that a subpoena must be quashed where it “requires disclosure of a privileged or protected matter” without any waiver or exception to support it. She rejected Plaintiff’s threshold argument that Billingsley lacked standing to seek to quash the subpoena, finding that a party with a claim of privilege with respect to the materials being sought by a subpoena has the right to object.

With respect to Plaintiff’s request for production of the litigation hold notice, Magistrate Judge Deavers first noted that “the fact of a litigation hold is not privileged or protected by work product,” but litigation hold letters generally are privileged and are not discoverable. Id. at *4. However, this rule is not absolute and can be overridden if a party makes a preliminary showing of spoliation, that is, “the intentional destruction of evidence that is presumed to be unfavorable to the party responsible for its destruction.” Magistrate Judge Deavers explained that spoliation sanctions are appropriate upon the satisfaction of three conditions: (1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the accused party destroyed the evidence with a culpable state of mind; and (3) the evidence destroyed is relevant to the other side’s claim or defense. Id. at *5.

Magistrate Judge Deavers ultimately found that Plaintiff had met its burden of making a preliminary showing of spoliation sufficient to support its request for production of the litigation hold notice. She based this finding on Billingsley’s own testimony that he deleted documents from his personal email account after he had been advised not to by his counsel. She also relied on email thread Plaintiff obtained from another defendant that was not produced by Billingsley, as well as the fact that Billingsley had preservation obligations arising from his receipt of a cease-and-desist letter in August 2021 and a complaint in an earlier action filed in September 2021. Magistrate Judge Deavers concluded that these circumstances “combine to elevate the issue of spoliation beyond the level of mere speculation.”

Magistrate Judge Deavers rejected Billingsley’s argument that any deleted documents were “innocuous and unrelated to the allegations of Plaintiff’s Complaint,” finding that she would not take Billingsley at his word that he deleted only documents unrelated to Plaintiff’s claims. She noted in particular that the mere absence of a reference to Plaintiff did not conclusively establish that a document is not relevant to Plaintiff’s misappropriation of trade secrets claim and that Billingsley is not an attorney and could not make relevance determinations.