By: Jeff Dreiling, Co-Founder
For several years, we have pondered the best way to gain the attention of our clients and potential clients. Many competitors in our space have been quick to jump to the scare tactic of “if you don’t engage with us, you will look silly and everyone will laugh at you as you lose your case.”
While we don’t go that far, we do attempt to strike harmony between sticking with tried and true methods that our clients have used to get them where they are and challenging them to evolve those methods to incorporate ESI strategies that are required for today’s successful litigators.
As we previously discussed, the volume of data created each day is growing at an unfathomable rate. Yet, if 90% of all work product created in corporate America never makes it to paper, then we cannot logically litigate in today’s world without addressing, understanding and embracing ESI strategies that help us gain access to that 90% that never makes it to paper. Every once in a while, there is a case that helps perfectly illustrate this point and, as H. Christopher Boehning and Daniel J. Toal expertly break down in their recent column in the New York Law Journal, we have a new example.
Boehning and Toal break down the case of GN Netcom v. Plantronics, and they think it should serve as a reminder to parties and practitioners to the importance of (eDiscovery) experts, and their testimony, as part of the discovery process. It also highlights the potentially significant impact of insufficient discovery processes on the overall outcome of matters.
This case first hit our radar at Complete Legal several years ago for a different, yet still connected reason. The initial notoriety came from severe sanctions that were handed down in this antitrust case involving two rival telephone headset makers. In 2016 the court applied the recently enacted Federal Rule of Civil Procedure (FRCP) 37(e) and ordered sanctions against Plantronics for an “executive’s intentional spoliation of evidence.” After the company instituted a legal hold. As the authors recap from the 2016 ruling granting sanctions;
- One executive ordered other employees to delete relevant emails but he also “double deleted” thousands of his own relevant documents and messages, rendering them unrecoverable.
- Other executives similarly concealed relevant information in a variety of ways.
- The cherry on top was when the court noted that their efforts to remediate the spoliation ended when the company halted an investigation by its own forensics’ expert, which would have led to a report on the full extent of spoliation, and instead, destroyed the email back-up tapes.
At the time, the District Court found that spoliation had indeed occurred and granted Plaintiff GN Netcom’s motion for spoliation sanctions. Relying on Rule 37 (e), the court issued monetary sanctions against Plantronics for almost 18 months of attorney fees and costs related to litigation of the discovery misconduct, an additional $3 million in punitive sanctions, possible future discovery sanctions, and a permissive adverse inference jury instruction.
At trial, however, the court ruled that Plaintiff GN Netcom’s eDiscovery expert could not testify and present evidence on the extent of Plantronics’s spoliation. The Court cited “a desire to reduce the risk of spoliation taking over the trial” and the “risk of unfair prejudice given the inflammatory nature of the evidence.” GN Netcom v Plantronics, 2019 WL 2998513 at *3 (3rd Cir. July 10, 2019)
The District Court decided to read ‘stipulations’ to the jury and limit parties to referencing only the facts in those stipulations during the trial. After the six-day trial, the jury found in Plantronics’s favor. The Plaintiffs then moved for a new trial, a motion that was denied by the District Court and then appealed to the Third Circuit.
GN Netcom appealed and asking that the sanctions be changed to a default judgment, as they had originally requested from the District Court. GN Netcom also sought a new trial based on the District Court’s refusal to hear from their eDiscovery expert at trial, which the Plaintiff argued could have impacted the jury’s understanding as to the spoliation of potentially key evidence. The Third Circuit first reviewed and affirmed the District Court’s sanctions decision finding that the lower court “thoroughly examined alternatives to default judgment and provided due consideration to their fairness and deterrent value.”
Next, the Third Circuit reviewed and considered the Plaintiff’s request for a new trial based on the exclusion of their eDiscovery expert’s testimony. The Third District found that the expert’s testimony would be relevant under the Federal Rules of Evidence 401 and 402 because “the District Court’s inference instruction made Plantronics’s spoliation a material issue for the jury.”
As proffered, [the expert’s] proposed testimony would have tended to show that the scope of [the executive’s] spoliation was more significant than Plantronics had represented, thereby helping the jury decide whether to draw an adverse inference – as it was instructed it could do.
The District Court explicitly chose to put certain issues of material fact, such as whether Plantronics engaged in a “massive cover-up to hide antitrust violations” in the jury’s hands. By withholding evidence regarding the scope of the spoliation, the court deprived the jury of the ability to make an informed decision about the adverse interference, and the instruction was less effective.
The Third Circuit also determined that the District Court’s exclusion of the eDiscovery expert’s testimony was not a harmless error because it was highly probable that the error had an impact on the outcome of the case. In a split decision, the court remanded the case, granting a new trial.
According to Mr. Boehning and Mr. Toal, the conclusion in GN Netcom v Plantronics is “a reminder to parties and practitioners of the key importance of experts – and their testimony – as part of discovery. And, importantly, it also highlights the potentially significant impact of insufficient discovery processes on the overall outcome of matters.”
Engaging an eDiscovery expert early in a matter could have prevented the spoliation to begin with. Even if the spoliation is intentional, as it appears to be in this case, an expert on the Plaintiff’s side could have helped with specific language and reporting requirements that would have exposed the spoliation practice of the defendant’s much earlier and could have helped get the court involved earlier, before the backup tapes were destroyed.
Even if that didn’t work, an expert could have helped to expedite justice and saved all parties time, money and from this ongoing distraction. The truth of what was “double deleted” is likely lost forever. The new trial is apt to be more of a spoliation trial instead of the original antitrust action. In these circumstances, it’s hard to spot a winner.