“Careless and Indifferent” Approach to Ediscovery Merits a Forensic Mirror Image
Electrified Discounters, Inc. v. MI Technologies, Inc., No. 3:13cv1332(RNC), 2015 U.S. Dist. LEXIS 64950 (D. Conn. May 19, 2015).
In this trademark infringement case, the court granted the motion of one defendant, MI Technologies, to compel Electrified Discounters’ responses to its requests for production and to create a mirror image of its sources of electronically stored information (ESI), including its hard drives and QuickBooks software.
Characterizing Electrified Discounters’ production of ESI as “careless and indifferent,” MI Technologies filed a motion to compel discovery responses. Specifically, MI Technologies claimed Electrified failed to implement a timely legal hold. According to MI Technologies, Electrified planned to file a lawsuit in 2011, but its counsel did not advise Electrified to preserve data until actually filing the lawsuit in 2013.
Furthermore, the president of Electrified testified in his deposition that he deletes e-mails about once a month, when his mailbox gets full. He stated that he deleted e-mails during the pendency of the litigation and admitted deleting approximately 1,000 of them the day before his deposition. The company also destroyed other potentially responsive records, including sales records, after one year.
MI Technologies further asserted that Electrified’s search for ESI fell well short. Although Electrified’s president claimed the company did not use electronic databases to track sales or inventory, another employee revealed that the company did in fact rely on software such as QuickBooks. Moreover, the president admitted using e-mail to communicate about business matters, even though Electrified produced none of his messages and produced only one e-mail in discovery “despite a diligent search.”
Based on these facts, the judge found MI Technologies’ concern that Electrified Discounters failed to observe the “well-established” duty to preserve was “well-founded” and asserted that “this [pattern of behavior] cannot continue.” Accordingly, she ordered Electrified to preserve all ESI and documents that might be potentially relevant to the litigation and to “image its sources of electronically stored information (‘ESI’), including its hard drives and QuickBook[s] files.” Further, she granted MI Technologies’ motion to compel with each of the 20 discovery requests included in the motion. In addition, she allows MI Technologies to reopen the deposition of Electrified’s corporate representative. Finally, she ordered Electrified to show cause why the court should not award the MI Technologies attorneys’ fees associated with its motion to compel.
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Counsel for Electrified suggested they were unaware that the company’s president used e-mail to communicate about work matters until his deposition. However, in this day and age, it seems unreasonable for counsel to accept any claim that only one relevant e-mail might exist or that any sales and inventory records might not be electronic.
Counsel have a responsibility to not only ensure that their clients are preserving evidence, but they also have a duty to make sure that their clients are diligently searching for and collecting that evidence once preserved. Otherwise, they may find their clients are not the only ones deserving of sanctions.