eDiscovery Gone Bad: Sanctions, Preclusions, and Fee Imposition

attentionAttorneys have a lot of duties… that is undeniable.  Also undeniable is that attorneys’ duties do not change simply because a case involves e-discovery.

Enter the case of Brown v. Tellermate Holdings Ltd., 2:11-cv-1122, (S.D. Ohio, July 1, 2014).  Brown’s 46-page long Opinion and Order by Magistrate Judge Kemp is a detailed explanation of the many ways that e-discovery can go wrong, and the crippling effects of bad e-discovery practice.

Plaintiffs, the Browns, were employed by defendant Tellermate until their employment was terminated involuntarily.  They brought this employment action against Tellermate et al. alleging age discrimination.  In reading the Court’s decision, it does not take long to realize that the Court was not happy with how discovery had been conducted by the defendants. The Opinion and Order notes (as early as page two) that “[d]iscovery did not go smoothly.”  “As the reader moves through the statement of facts, it should become apparent that significant problems arose in this case for one overriding reason: counsel fell far short of their obligation to examine critically the information which Tellermate gave them about the existence and availability of documents requested by the Browns.  As a result, they did not produce documents in a timely fashion, made unfounded arguments about their ability and obligation to do so, caused the Browns to file discovery motions to address these issues, and, eventually, produced a key set of documents which were never subject to proper preservation. The question here is not whether this all occurred – clearly, it did – but why it occurred, and what, in fairness, the Court needs to do to address the situation which Tellermate and its attorneys have created.” Id. at 2-3.  [Emphasis added.]

The Opinion reminds us of attorney obligations under Fed.R.Civ.P. 26(g), which, in part, requires that in signing disclosures, the attorney certifies that the statements contained therein are truthful and were formed after a reasonable inquiry.  The Opinion goes on to note that “Tellermate, with the participation of its counsel, either intentionally or inadvertently failed to fulfill certain of its discovery obligations, leading to a cascade of unproductive discovery conferences, improperly-opposed discovery motions, and significant delay and obstruction of the discovery process. All of this was accompanied by counsel’s repeated and unequivocal statements about crucial facts concerning the discovery process – statements which, for the most part, turned out simply to be untrue.”  Id. at 4.

The Court did not stop there. In its examination of the discovery practices that had transpired, the Court asked, “Did Tellermate comply with its duty under the Rules to provide full, truthful, and appropriate discovery responses, and did its counsel make a reasonable investigation before taking Tellermate at its word? The answer to these questions is clearly no.”  Id. at 31.  “Tellermate… knew that every statement it made about its control over, and ability to produce, the salesforce.com records was not true when it was made… Its representations were illogical and were directly contradicted…. And yet Tellermate’s counsel made these untrue statements repeatedly, in emails, letters, briefs, and during informal conferences with the Court, over a period of months, relenting only when the Court decided that it did not believe what they were saying.  This type of behavior violated what has been referred to as “the most fundamental responsibility” of those engaged in discovery, which is “to provide honest, truthful answers in the first place and to supplement or correct a previous disclosure when a party learns that its earlier disclosure was incomplete or incorrect.”  Id. [Internal citations omitted.] “The discovery process created by the Federal Rules of Civil Procedure is premised on the belief or, to be more accurate, requirement that parties who engage in it will truthfully answer their opponents’ discovery requests and consistently correct and supplement their initial responses. That did not happen here.”  Id. [Internal quotes and citations omitted.]

When it comes to the attorneys’ specific responsibilities, the Court pointed out that “…counsel cannot simply take a client’s representations about such matters at face value. After all, Rule 26(g) requires counsel to sign discovery responses and to certify their accuracy based on “a reasonable inquiry” into the facts.” Id. at 32.

As a result of the numerous issues in defendants’ discovery practices, the Court found sanctions appropriate for making a discovery certification in violation of Rule 26(g) without substantial justification, for failing to permit inspection of documents, for failing to comply with a court order to provide or permit discovery, and under common law relating to spoliation of evidence.

However, the Court did not just stop at sanctions.  A result of the defendants and defendants’ attorneys’ actions, the Court determined that:

  • “Tellermate shall not, in connection with either the pending summary judgment motion or at trial, be entitled to present or rely upon evidence that it terminated the Browns’ employment for performance-related reasons.” at 45.

Now, if you are not familiar with employment discrimination lawsuits, you should know that your best – and often only – defense in such actions is to claim that the subject termination was for performance-based reasons.  Being precluded from doing so is, frankly, nearly the equivalent of the plaintiff being granted summary judgment.

The Court also found it appropriate that:

  • “Tellermate and its counsel shall pay, jointly, the Browns’ reasonable attorneys’ fees and costs incurred in the filing and prosecution of those two motions as well as in the filing of any motions to compel discovery…” at 46.

What can we learn from this?  It is crucial for attorneys to ask key questions of their clients when it comes to discovery – no matter if it is e-discovery or not.  Before you sign that discovery response, you had better be reasonably sure you know what is out there.

If you liked this blog you might also be interested in reading: Even with changes to the Rules, “proportionality in discovery under the Federal Rules is nothing new.”

Download our free whitepaper to learn why simpler is better.

eDiscovery Whitepaper: Making It Simple

author avatar
Marketing Admin