For recent non-California cases relating to electronic discovery see  ELECTRONIC DISCOVERY NEW DEVELOPMENTS
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Original E-discovery Proposal Pushed in California   By a unanimous vote on April 25, 2008, the Judicial Council of California approved proposed legislation regarding civil discovery of "electronically stored information" which is likely to be enacted in the next few months. With minor exception, public comments and suggestions for improving the original version were rejected. Highlights of the proposed legislation include the following:

R & R Sails Inc. v. Ins. Co. of Pa.(S.D. Cal. 2008), 2008 WL 2232640    Sanctions for failure of a claims examiner to search for and produce electronic notes in database in an insurance breach of contract case. The Court ordered payment within 30 days of $39,914.68 [Cf. $67,154.72 requested and itemized] as reasonable expenses incurred due to the failure to conduct a reasonable investigation and produce electronic records from a data base. Sanctions were mandated since the failure to produce electronic notes was not “substantially justified” because the claims examiner “failed to recognize that the ... database that he entered notes into contained the 'daily activity logs or telephone records' that Plaintiff had been requesting.”
The Court also precluded evidence “Based on Defendant's past failure to timely produce electronically- stored information, and Plaintiff's concern that additional responsive electronically-stored information may be in Defendant's possession. ***The introduction of any documents or electronically-stored information which have already been requested by Plaintiff but were not produced by Defendant within the discovery period, would risk prejudice to Plaintiff.” The Magistrate recommended “that Defendant be precluded from relying on or introducing any documents, testimony, or expert witness' testimony which relies on documents or electronically-stored information that was requested by Plaintiff but was not produced by Defendant on or before [the close of discovery.”
Documents requested in state court under C.C.P. §2031 were defined by reference to the definition in Evidence Code 250. After removal to federal court, the Magistrate noted that the “boilerplate definition of "document" ... did not provide clear notice that Plaintiff sought discovery from electronic sources” but considered electronic documents to be within the scope of the request. It also noted that the requester had sent two letters requesting written or electronic copies of the documents at issue but that there was “no indication that the parties discussed the discovery of electronically-stored information at their 26(f) conference.” The court rejected the responding parties explanation “that [claims examiner] did not associate Plaintiff's document request with the electronically-stored records which are maintained on his computer rather than in hard-copy, paper form.”

In re Flash Memory Antitrust Litig.(N.D. Cal. ​ 2008), 2008 WL 1831668 (4/22/08)
ORDER REGARDING PRESERVATION OF EVIDENCE enterred in Northern District of California, SAUNDRA B. ARMSTRONG, District Judge.
IT IS HEREBY ORDERED THAT:
All parties and their counsel are reminded of their duty to preserve evidence that may be relevant to this action. The duty extends to documents, data, and tangible things in the possession, custody and control of the parties to this action, and any employees, agents, contractors, carriers, bailees, or other non-parties who possess materials reasonably anticipated to be subject to discovery in this action. "Documents, data, and tangible things" shall be interpreted broadly to include writings, records, files, correspondence, reports, memoranda, calendars, diaries, minutes, electronic messages, voice mail, E-mail, telephone message records or logs, computer and network activity logs, hard drives, backup data, removable computer storage media such as tapes, discs and cards, printouts, document image files, Web pages, databases, spreadsheets, software, books, ledgers, journals, orders, invoices, bills, vouchers, check statements, worksheets, summaries, compilations, computations, charts, diagrams, graphic presentations, drawings, films, charts, digital or chemical process photographs, video, phonographic, tape or digital recordings or transcripts thereof, drafts, jottings and notes, studies or drafts of studies or other similar such material. Information that serves to identify, locate, or link such material, such as file inventories, file folders, indices, and metadata, is also included in this definition. Until the parties reach an agreements on a preservation plan or the Court orders otherwise, each party shall take reasonable steps to preserve all documents, data, and tangible things containing information potentially relevant to the subject mater of this litigation. In addition, counsel shall exercise all reasonable efforts to identify and notify parties and non-parties of their duties, including employees of corporate or institutional parties, to the extent required by the Federal Rules of Civil Procedure.

Serrano v. Stefan Merli Plastering Co., Inc. (2008), Cal.App.4th No. B193502. Second Dist., Div. Three. May. 7, 2008 Trial Court can determine if a court reporter fee charged a non-noticing party is reasonable and, if not, determine the appropriate amount and order payment on appropriate terms.
Expert depositions were taken a month before trial and the non-noticing party requested a copy of the transcript but objected to the reporter's fee. “The [parties] agreed that the court would determine "the validity and reasonableness" of the expedited service fee and that the ruling would govern the fees for all other deposition transcripts in this action.” The trial court expressed the opinion that the reporter's fee was unconscionable but determined it could not determine the fee based on Urban Pacific Equities Corp. v. Superior Court (1997) 59 Cal.App. 4Th 688. The Court “remanded with directions to the trial court to (1) determine whether the expedited service fees charged by Coast for copies of deposition transcripts were reasonable, and (2) if any of those amounts were unreasonable, order Coast to refund to the Serranos the amounts paid by the Serranos in excess of the reasonable charges.
“Our holding is limited to circumstances where (1) there is no relevant contractual relationship between the deposition reporter and the non-noticing party relating to the cost of a copy of the deposition transcript and (2) court intervention is required to ensure that the deposition reporter provide a copy of a deposition transcript to a non-noticing party in a pending action where the reporter has either refused to provide such a copy or is willing to do so only on the condition that the non-noticing party pay what it believes to be an unreasonable fee.”

Hirano v.Hirano (Cal. App. Second Dist., Div. 8;December 19, 2007) (As modified Jan.2, 2008) 158 Cal.App.4th 1. After reversal of judgment entered after dismissal for failure to prosecute and remand for a trial, discovery reopens. The prior demand for exchange of experts is of no effect.
In the first trial, experts were precluded because of non-disclosure in accord with a demand. A continuance of the first trial because of the unavailability of a party was denied and that action dismissed for failure to prosecute. The judgment based on that dismissal for failure to prosecute was reversed and the matter remanded for a new trial.
After remand, on the new date of trial, the trial court granted respondent’s motion to preclude appellant from introducing any expert testimony based upon non-compliance in the second trial with the demand made in the first trial. No new demand had been made in the second trial; but, the moving party had made a disclosure by fax. Because the appellate had no expert witnesse due to the preclusion order, the trial court granted respondent’s motion for nonsuit. The Court of Appeal reversed this judgment for improper exclusion of evidence stating as follows.
"When the prior judgment was reversed, the matter remanded and a new initial trial date set, discovery was automatically reopened. (Fairmont, supra, 22 Cal.4th at p. 250; Beverly Hospital, supra, 19 Cal.App.4th 1289.) Because neither party made a section 2034.210 demand for exchange of expert witness information in connection with the new initial trial date, neither was required to comply with section 2034.260. (West Hills, supra, 98 Cal.App.3d at p. 660.) Accordingly, the trial court erred in excluding appellant’s expert witness evidence on the grounds that appellant failed to make a timely exchange of expert witness information."

Snyder v. Superior Court (Caterpillar, Inc.) (Cal.App.Second Dist., Div. 2; December 18, 2007) 157 Cal.App.4th 1530. The Court held a local rule requiring disclosure of absolute or qualified work product is invalid. The court concluded without extensive discussion as follows:

Krinsky v. Doe 6 (2008) , Cal.App.4^th     1^st Amendment protection of identity of anonymous speaker on Internet. Because plaintiff in a defamation action failed to establish a prima facie case in opposition to a motion to quash, plaintiff's discovery of the identity of an Internet poster and potential defendant from the poster's ISP is protected and prevented by the First Amendment right to speak anonymously.
“...Krinsky served a subpoena.... Yahoo! notified Doe 6 that it would comply with the subpoena in 15 days unless a motion to quash or other legal objection was filed. Doe 6 then moved in superior court to quash the subpoena on the grounds that (1) plaintiff had failed to state a claim sufficient to overcome his First Amendment rights for either defamation or interference with a contractual or business relationship, and (2) plaintiff's request for injunctive relief was an invalid prior restraint.”
“Where it is clear to the court that discovery of the defendant's identity is necessary to pursue the plaintiff's claim, the court may refuse to quash a third-party subpoena if the plaintiff succeeds in setting forth evidence that a libelous statement has been made. fn. 14 When there is a factual and legal basis for believing libel may have occurred, the writer's message will not be protected by the First Amendment.[citations] Accordingly, a further balancing of interests should not be necessary to overcome the defendant's constitutional right to speak anonymously.”
The trial court failed to determine whether a prima facie case for defamation had been presented. The Appellate Court concluded “that the language of Doe 6's posts, together with the surrounding circumstances -- including the recent public attention to SFBC's practices and the entire "SFCC" message-board discussion over a two-month period -- compels the conclusion that the statements of which plaintiff complains are not actionable.”
“We thus conclude [the online statements] were not actionable under Florida's defamation law. Because plaintiff stated no viable cause of action that overcame Doe 6's First Amendment right to speak anonymously, the subpoena to discover his identity should have been quashed.”

Puerto v. Superior Ct. (Wild Oats Markets, Inc.), No. B199631 (1/15/08) In a case “alleging wage and hour violations, contact information required for 2600 employees identified as potential witnesses in response to Form Interrogatory 12.1.  An "opt in" approach is unduly restrictive.  See also Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360.  
After initially responding with boilerplate objections, defendant provided the names and positions but not contact info of 2600 - 3000 witnesses to the incident subject to all objections but later suggested they may not actually be witnesses. Ultimately, the trial court required the identified “witnesses” to consent in writing and “opt in” as a prerequiste for disclosure of contact information. The appellate court issued a writ vacating that order and requiring disclosure. It discussed privacy rights extensively.
“During discovery , the trial court partially granted a motion to compel Wild Oats to provide the telephone numbers and addresses of individuals previously identified by name by Wild Oats in response to a form interrogatory, adopting a procedure to protect their privacy by sending a notice that would have required those individuals to fill in a postcard authorizing a third party administrator to disclose their addresses and phone numbers to petitioners. We conclude that the opt-in notice unduly hampers petitioners in conducting discovery to which they are entitled by erecting obstacles that not only exceed the protections necessary to adequately guard the privacy rights of the employees involved but also exceed the discovery protections given by law to far more sensitive personal information. Based on this conclusion, we hold that the trial court abused its discretion, and grant the writ.”***“Let a peremptory writ of mandate issue directing the superior court to vacate its order allowing disclosure and contact only if the witness consents, and to enter a new order directing the disclosure of contact information for the individuals identified in response to Form Interrogatory No. 12.1. This order is without prejudice to petitioners seeking a further response to the Form Interrogatory that includes only those persons Wild Oats believes to have percipient knowledge.”
“Apparently mindful of the fact that the right to privacy in contact information is unlikely to trump the petitioners' right to investigate their claims by contacting witnesses, Wild Oats vigorously argues that the population whose information is sought by petitioners cannot be characterized as witnesses. Taking this position requires Wild Oats to assert that the individuals it identified under oath in response to discovery are not potential witnesses.”
“In response to Form Interrogatory No. 12.1, Wild Oats identified approximately 2600 witnesses, but refused to tell petitioners how to find them. Petitioners have a statutory entitlement to the contact information for these witnesses.” [citations]
Factual distinctions from the Pioneer case were noted “...we also note that salient distinctions exist between that case and the circumstances here. In Pioneer, the plaintiffs sought not just contact information, but the very identities of the affected individuals; here the witnesses' identities have already been disclosed. Moreover, the discovery in Pioneer was precertification discovery designed to identify members of the class rather than to locate percipient witnesses, although the Supreme Court did note that some number of the potential class members would also be witnesses. This procedural distinction explains why the opt-out letter outcome of Pioneer is not necessarily appropriate here: in Pioneer, the plaintiffs were looking for people who would want to participate in the lawsuit. As pursuing litigation is a voluntary activity, an opt-out letter that offered recipients the option of participating or declining to participate was appropriate. In contrast, a percipient witness's willingness to participate in civil discovery has never been considered relevant--witnesses may be compelled to appear and testify whether they want to or not.”

Rico v. Mitsubishi Motors (2007),  42 Cal.4th 807 (Filed 12/13/07)       Recipient's ethical duty upon receipt of  inadvertently  produced documents that are privileged, confidential or protected from discovery.      Attorney disqualification upheld.  

The Supreme Court determined a document, in toto, to be absolute work product and to have been inadvertently produced. It adopted the ethical standard set forth in State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal. App. 4th 644.  It also agreed that the “standard applies to documents that are plainly privileged and confidential, regardless of whether they are privileged under the attorney-client privilege, the work product privilege, or any other similar doctrine that would preclude discovery based on the confidential nature of the document.”

The Supreme Court found no abuse of discretion and affirmed the disqualification of counsel as an appropriate remedy.

Rico v. Mitsubishi Motors Corp. (2007) 42 Cal.4th 807 Attorney generated document reflecting attorney's thoughts and notes is  protected as Absolute Work Product.   Document prepared by a person acting as a paralegal regarding an expert interview as to case evalutation and strategy created at direction of counsel that reflects counsel's thought process and contain counsel's notes is protected as absolute work product. Trial and appellate courts found and the Supreme Court afffirmed that “the entire document was protected as attorney work product.”
2 client reps & case manager, 2 lawyers, and 2 "designated defense experts" met "to discuss their litigation strategy and vulnerabilities. Case Mgr. and outside Atty "had worked together over a few years. Atty asked Case Mgr. "to take notes at the meeting and indicated specific areas to be summarized. Case Mgr. typed the notes on Atty's computer and acted as Atty's paralegal. Case Mgr. returned the computer and never saw a printed version of the notes. Atty printed only one copy of the notes, which he later edited and annotated. Atty never intentionally showed the notes to anyone, and the court determined that the sole purpose of the document was to help Atty defend the case.
“The notes were written in a dialogue style and summarize conversations among two outside counsel and the two experts. They are dated, but not labeled as 'confidential' or 'work product.' The printed copy of these compiled and annotated notes is the document at issue here. The document contained notations by one counsel but had never been seen by co-counsel.
“The document is not a transcript of the...strategy session, nor is it a verbatim record of the experts’ own statements. It contains [Case Mgr.'s] summaries of points from the strategy session, made at [Atty.'s] direction. [Atty] also edited the document in order to add his own thoughts and comments, further inextricably intertwining his personal impressions with the summary. (See Rodriguez, supra, 87 Cal.App.3d at pp. 647-648.) In this regard, the trial court found: 'As to the content of the document, although it doesn’t contain overt statements setting forth the lawyer’s conclusions, its very existence is owed to the lawyer’s thought process. The document reflects not only the strategy, but also the attorney’s opinion as to the important issues in the case. Directions were provided by [Atty] as to the key pieces of information to be recorded, and [Atty] also added his own input as to the important details, by inserting other words in the notes. The attorney’s impressions of the case were the filter through which all the discussions at the conference were passed through on the way to the page.' The court concluded, '[T]his court determines that the attorney’s directions to record only portions of the conference specific to the attorney’s concerns in the litigation are sufficient to support the finding that the notes are covered by the absolute work product [doctrine], as the choices in statements to record show the thought process and are too intertwined with the document.'
“Although the notes were written in dialogue format and contain information attributed to Mitsubishi’s experts, the document does not qualify as an expert’s report, writing, declaration, or testimony. The notes reflect the paralegal’s summary along with counsel’s thoughts and impressions about the case. The document was absolutely protected work product because it contained the ideas of [Atty] and his legal team about the case. (§ 2018.030, subd. (a).)”

Unzipped Apparel, LLC v. Bader (2007), 156 Cal.App.4th 123, 67 Cal.Rptr.3d 111 When a nonparty served with a records subpoena elects to file an objection rather than comply with the duty to produce, the propounding party is required to move to compel within 60 days of receipt of that objection or waive its right to compel.

Mota v. Superior Court (Villalobos) 2007), Cal.App.4^th [No. G038289. Fourth Dist., Div. Three. Oct. 22, 2007.] Discovery was denied in a probate proceeding involving objections to a trustee's distribution because a formal petitioner pursuant to Probate Code Sec. 850 to recover funds had not been filed. The appellate court ruled the petition was not a prerequisite to conducting discovery relevant to the accounting and distribution. The appellate court directed “respondent court to vacate its order denying discovery and to reconsider Mota's motion to compel to determine whether the documents she seeks are discoverable. Although personal financial information was involved in the discovery, the privacy issue was not raised or determined.

Belaire-West Landscape, Inc. v. Superior Court (2007), 149 Cal. App. 4th 554  Privacy of complainants protected in putative class action for wage and hour violations by providing notice and opprtunity to object and opt out.
“During precertification discovery, the trial court granted a motion to compel Belaire-West to provide the names and contact information of all current and former Belaire-West employees and adopted a proposed notice to those individuals that would have required them to object in writing in order to prevent information about them from being disclosed to the real parties in interest..Applying Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 [53 Cal. Rptr. 3d 513, 150 P.3d 198] (Pioneer), we conclude that the opt-out notice adequately protects the privacy rights of the current and former employees involved. We deny the writ.”
“ We conclude that the trial court properly evaluated the rights and interests at stake, considered the alternatives, balanced the competing interests, and permitted the disclosure of contact information regarding Belaire-West's current and former employees unless, following proper notice, they objected in writing to the disclosure. Requiring current and former employees to object to disclosure of their identities and contact information presents no serious invasion of their privacy interests.” [see the opinion for the text and content of the notice and the findings of the trial court.]
The Court set forth the following elements based on the Hill and Pioneer cases:

“As a starting point, the claimant must possess a “legally protected privacy interest.”
Next, the claimant must have a reasonable expectation of privacy under the particular circumstances, including the customs, practices, and physical settings surrounding particular activities.
Third, the invasion of privacy must be serious in nature, scope, and actual or potential impact; trivial invasions do not create a cause of action.
If a claimant meets these criteria, then the court must balance the privacy interest at stake against other competing or countervailing interests. (Pioneer, supra, 40 Cal.4th at pp. 370–371.)”

Zurich American Ins. Co. v. Superior Court (Watts Industries, Inc.) (2007) , Cal.App.4th   [No. B194793. Second Dist., Div. Four. Oct. 11, 2007.] The appellate court reversed the trial court when it stated and presumably applied a definition of attorney–client privilege that did not include the language of Evidence Code Section 952, which permits disclosure to those to whom disclosure is reasonably necessary for the accomplishment of the purpose for which the lawyer is consulted. After an agreed in camera inspection of the first 76 documents, the referee and trial court had overruled the privilege claims.
“The referee recognized that many of the disputed documents 'indicate internal litigation plans and strategy with respect to the cases in dispute,' but 'the attorney-client privilege is limited to communications by counsel to a client, and by a client to counsel. The fact that many of the disputed items contain discussion of legal matters, strategy, and status of the bad faith litigation cannot be used to cloak them with either the attorney-client privilege or the work product privilege for that reason alone.'"
“[Defendant]contends the trial court...used the wrong standard in overruling its claim of attorney-client privilege.... We agree that the challenged orders employed an overly restrictive definition of the attorney-client privilege, and grant relief on that basis.”
“The fundamental issue in this case is whether corporate communications not directly involving an attorney, but which discuss legal advice, come within this privilege. As we have seen, the discovery referee and trial court adopted a definition of the attorney-client privilege limited to "items in the claim file that contain actual copies of letters or e-mail communications from outside counsel, or documents that have been created by counsel, or received by counsel, or that contain direct communications from counsel, as indicated in the comment section of the attached listing of documents, . . ." This definition is inadequate because it fails to take into account language of section 952 expressly contemplating that confidential communications include information transmitted to persons "to whom disclosure is reasonably necessary for the transmission of the information," and those to whom disclosure is reasonably necessary for "the accomplishment of the purpose for which the lawyer is consulted." Section 952 expressly includes legal opinions and advice given by a lawyer within the definition of confidential communication.”
The appellate court did not rule on any documents. It discussed basic statutory and case law, as well as the Restatement Third of Law Governing Lawyers, and provided “guidelines” to the trial court before remanding the matter for the trial court “to conduct a new review of the disputed documents applying the principles related to the attorney-client privilege expressed in this opinion.”

Foothill Federal Credit Union v. Superior Court (Cal.App. 2 Dist.,2007), 2007 WL 2757429, 2007 Cal. App. LEXIS 1596 Custodian that produces personal records in response to a subpoena that fails to comply with C.C.P. 1985.3 is protected by the Litigation Privilege [Civil Code Section 47(b)] and cannot be sued for intentional infliction of emotional distress or invasion of privacy.

Mardirossian & Associates, Inc. v. Ersoff (2007), 153 Cal.App.4th 257 . Improper to exclude testimony inconsistent with deposition testimony. "The usual purpose of motions in limine is to preclude the presentation of evidence deemed inadmissible and prejudicial by the moving party.'" (Kelly v. New West Federal Savings (1996) 49 Cal.App.4^th 659, 669 (Kelly).) ***
His deposition testimony is not inconsistent with his trial testimony on that point; but, even if it were, the trial court properly concluded such inconsistency was to be evaluated by the trier of fact. (Kelly, supra, 49 Cal.App.4th at p. 673.) As our Division Four colleagues recognized in Kelly, although a party may be precluded from introducing evidence contrary to its response in a request for admission (Code Civ. Proc., § 2033.410, subd. (a)), deposition testimony does not serve the same purpose as a request for admission, which is aimed primarily "at setting at rest a triable issue so that it will not have to be tried." (Kelly, at p. 673.) Accordingly, "[i]t is a misuse of a motion in limine" to attempt to compel a witness or a party to conform his or her trial testimony to his or her deposition testimony. Trial testimony may be impeached by inconsistent deposition testimony, but absent an abuse of the discovery process, such testimony should not be precluded. (Id. at p. 672.)"

Jacob B. v. County of Shasta, 40 Cal.4th 948, 154 P.3d 1003, 56 Cal.Rptr.3d 477. Litigation privilege applies to and prohibits an action based on the constitutional right to privacy. Official writing a letter to be used in litigation is protected by the litigation privilege and cannot be sued for violating the right to privacy of a non-party. The Constitutional Right to Privacy is not absolute and must be balanced against the absolute litigation privilege of Civil Code 47(b) which encourages participation in judicial proceedings.

Michaely v. Michaely (2007), 150 Cal.App.4^th  802[2d Dist., Div. 5. Apr. 16, 2007.] Sanctions establishing factual findings upheld. The appellate court rejected the argument “that discovery sanctions can only be imposed for failure to comply with a court order, or when a pattern of discovery abuse leads to a loss of evidence” and upheld sanctions based on the broad discretion that trial courts have. Factual findings established based on egregious discovery misconduct.
The discovery referee “...found that at the deposition, Husband engaged in intentional, pervasive, and egregious evasiveness, was willfully untruthful, and gave inconsistent and contradictory testimony. His conduct at the deposition was the equivalent of refusing to sit for the deposition, in violation of court order. Husband failed {Slip Opn. Page 4} to produce documents in response to the request for production, did not produce documents he claimed to have produced, claimed that he could not identify documents which he did produce, and intentionally produced voluminous documentation which was not responsive. He had in the past failed to comply with other discovery. His intentionally evasive and obstreperous conduct deprived Wife of meaningful discovery.” The Court found “that the order was necessary to level the playing field and prevent Wife from being prejudiced by Husband's willful and egregious misuse of discovery, and that the imposition of lesser sanctions would not be a sufficient remedy. The court found: "[Husband's] consistent evasion, coupled with [his] responses which were blatant untruths and not credible, amounted to an egregious abuse of the discovery process."
Objections to the discovery referee were rejected as non-prejudicial and waived as untimely.

Steven M. Garber & Assoc. v. Eskandarian (2007) , 150 Cal.App.4th 813 [2d Dist., Div.8. Apr. 24, 2007] Opinion modified and certified for partial publication.  Terminating sanctions for not complying with order compelling further responses. Form and special interrogatories and production requests were served on multiple defendants who failed to object on time and then served multiple late objections. The trial court ordered further responses and awarded sanctions against the parties and counsel. When further responses were not filed, terminating sanctions were granted. The appellate court affirmed stating “Given that appellants themselves had brought on the situation that the court had to resolve on January 26, 2005, the trial court could do nothing other than what it did do, which was to grant the motion for terminating sanctions and to offer appellants a chance to set that order aside.”
“Appellants' contention that a statement of damages should have been filed before the default was taken is without merit. A statement of damages is required only in cases involving personal injuries or wrongful death. (Code Civ. Proc., § 525.11.)” 

Reedy v. Bussell (2007), 148 Cal.App.4th 1272, 56 Cal.Rptr.3d 216 Terminating sanctions affirmed stating “Based upon the record before us, we can only wonder what took it so long.” On two other, matters the sanctions entering specific dollar judgments were reversed since specific damages had not been alleged. It was suggested that only the issue of damages need be tried and that liability could be established by a more limited sanction order.  

Parker, v. Wolters Kluwer United States (2007), 149 Cal.App.4th 285, A party repeatedly failed to comply with discovery obligations and court orders and the court awarded monetary and terminating sanctions. Terminating sanctions were upheld as to the complaint when the propounding party was denied discovery on it. The sanctions were reversed as to both non-propounding and propounding parties when sanctions went beyond rectification of the discovery abuses. When discovery related to the complaint but not the cross-complaint, terminating sanctions on the cross-complaint were reversed. It was also an abuse of discretion to award sanctions in favor of non-propounding parties when they were not justified by a showing of prejudice. Parties seeking sanctions have the burden to show prejudice. The court noted and discussed a seeming inconsistency in decisions relating to sanctions in favor of non-propounding parties.
Violation of a prior order is not a prerequisite for monetary sanctions. Findings that opposition was without substantial justification are not required when sanctions are granted. Monetary sanctions are required on the “first offense” unless the court makes an express finding that the failure to provide discovery was “without substantial justification.”
Ex parte motion after oral notice at a deposition is proper to compel attendance but not to obtain sanctions for discovery abuses.
A party waives objections to distance limitations by failing to object 3 days prior to the deposition.

Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007),  148 Cal.App.4th 390.   Filing responses after a motion to compel and before a hearing on the motion does not deprive the court of its authority to grant the motion and award sanctions. When defendants failed to comply with that order, the trial court awarded an additional $8,786.36 monetary sanctions but denied terminating sanctions. On appeal the validity of the underlying order to compel and the sanctions orders were affirmed: “...we hold that the mere service of an untimely interrogatory response,... does not divest the trial court of authority to hear and grant a motion to compel responses....” The Court also noted that statements of inability to answer interrogatories were not legally valid responses. The trial court could reasonably conclude that the interrogatory responses were in bad faith and intended "merely [to] obstruct[] and delay[] discovery." In addition, defendants did not "produce all documents within 20 days," and failed to identify any of the documents they withheld.

The Supreme Court reviewed Hill v. National Collegiate Athletic Assn. (1994), 7 Cal.4th 1

Assuming that a claimant has met the foregoing Hill criteria for invasion of a privacy interest, that interest must be measured against other competing or countervailing interests in a "balancing test."[citations] "Conduct alleged to be an invasion of privacy is to be evaluated based on the extent to which it furthers legitimate and important competing interests."...Protective measures, safeguards and other alternatives may minimize the privacy intrusion. "For example, if intrusion is limited and confidential information is carefully shielded from disclosure except to those who have a legitimate need to know, privacy concerns are assuaged." (Ibid.)        [See below re appellate opinion]

Britts v. Superior Court (2006), 145 Cal.App.4th 1112   "We hold ... that discovery motions, including those that are pending, are also stayed upon the filing of an anti-SLAPP motion."

United States v. Long (9/27/06) Crim. App. No. 200201660,  United States Court of Appeals for the Armed Forces, Argued February 21, 2006, Decided September 27, 2006. www.armfor.uscourts.gov/opinions/2006Term/05-5002.pdf   Court of Appeals for the Armed forces found a soldier had reasonable expectation of privacy in e-mails sent and received on a military computer and stored on a server and that evidence obtained by search should be excluded. The decision was based on the announced policy for monitoring computer use, the practice of the administrators and the password protection of the uses.
"As noted, in examining Fourth Amendment privacy interests,the courts look first to whether the individual had a subjective expectation of privacy.If the courts ascertain that a subjective expectation of privacy exists, they then determine if that expectation is one that society is prepared to accept as reasonable." Page 12. Citing Minnesota v. Olson, 495 U.S. 91, 95-96 (1990); United States v. Monroe, 52 M.J. 326, 330 (C.A.A.F. 2000). O’Connor v. Ortega, 480 U.S. 709, 715 (1987) (plurality opinion).

Carpenter v. Superior Court (Yamaha Motor Corp., USA) (2006), 141 Cal.App.4th 249     Orders compelling mental examinations must specify the name of any test. Production of a copy of the test is not prohibited by copyright law. "Carpenter raises two issues: (1) whether the trial court complied with the requirement of section 2032.320 to "specify the . . . diagnostic tests and procedures . . . of the examination" by ordering "standardized written psychological tests" of "emotional and cognitive functioning;" and (2) whether the court abused its discretion in failing to allow him to obtain a copy of the written testing materials and his written answers." {Slip Opn. Page 8} C.C.P. "section 2032.320 requires the trial court to list by name the diagnostic tests and procedures to be employed in the mental examination." "The way to describe these "diagnostic tests and procedures"--fully and in detail--is to list them by name."{Slip Opn. Page 10}
The court held that the existence of a valid copyright on test did not preclude their production in discovery: "Based on the record before it, the trial court erred in concluding that the written test questions could not be provided to Carpenter due to copyright law." The court noted that defendant was not the holder of the copyright. Correspondence from the copyright holders suggested protective order protection: restricting access, use, disclosure and copying; restrictive legend on the produced materials; requiring return or destruction; and sealing the record. The matter was referred to the trial court for further consideration of protective order provisions and any examiner's ethical and professional obligations and for the exercise of its discretion.

Karlsson v. Ford Motor Co.    (2006)  140 Cal.App.4th 1202,  2006 WL 1740394   Evidentiary and issue sanctions based on pattern of abusive discovery conduct. Adverse inference instruction  spoliation sanction based on EC §413.  "We hold that evidence and issue preclusion sanctions that were ordered against Ford for various discovery violations were properly imposed before trial." [A]"...violation of a discovery order is not a prerequisite to issue and evidentiary sanctions when the offending party has engaged in a pattern of willful discovery abuse that causes the unavailability of evidence. " e.g. inter alia  "failure to designate a proper warnings PMK... failure to produce drawings and prototypes ... concealment of relevant documents..., concealment of an existing four-point belt system, and its failure to produce a Ford employee to conclude her deposition....[amounting] to a "pattern of discovery abuse," and that Ford had both violated court orders and had misused the discovery process. .... Because the discovery cut off had passed, and because trial was imminent, TCT and Johan lost the opportunity to explore fully any leads obtained from discovery that should have been produced. ***   The decision also referred to "continual delay", "discovery responses that were both deceptive and dilatory", "responses that were neither straightforward nor unambiguous" "evaded[ing] discovery by providing TCT with too many documents, and without proper itemization, in order to overwhelm TCT with written material" failing to "provide a declaration identifying what documents were located in the ...reading rooms", failing to provided the "name of the employee who could have truly served as the PMK on the warnings issue. That person no longer worked for Ford, and it was unclear whether TCT could have located him and obtained an out-of-state commission for his deposition"
The court instructed the jury and allowed counsel to "argue the spoliation inference" based on the disappearance of the car seat after an opposing expert had examined it. The "...court instructed the jury pursuant to Evidence Code section 413 that if it found a party had willfully suppressed or destroyed evidence that the jury could consider that fact in determining what inferences to draw from the evidence."  "The court also did not err when it imposed lesser sanctions against plaintiff for failing to preserve certain evidence."
.."We also hold that those sanctions were, for the most part, properly applied during the trial in the form of jury instructions, evidentiary rulings, and plaintiff's jury arguments, and that any errors by the court were harmless. We also conclude that, because the court imposed discovery sanctions after it had summarily adjudicated plaintiff's punitive damages claims in Ford's favor, the court was entitled to reconsider and vacate its summary adjudication order. "

Cooley v. Superior Court (Greenstein) (June 26, 2006) , 140 Cal.App.4th 1039 The business records subpoena can only be used to obtain documents from persons who can execute the business records affidavit. "At first blush, it would seem that a person or entity that maintains records would also be the custodian of those records. Nevertheless, the custodian of records or other qualified witness contemplated by Evidence Code section 1561 must also be able to attest to various attributes of the records relevant to their authenticity and trustworthiness. As such, execution of a section 1561 affidavit is more than simply a clerical task." ..."And as section 1561 now stands, the [person merely in possession of records] is unable to comply with subdivision (a)(4) and (5), and, thus, is not a [proper] custodian of the records sought."
C.C.P. §2020.020 provides for three situations for the issuance of a subpoena: (a)only testimony (b) only business records for copying per §2020.410 and (c) testimony and production. C.C.P. §2020.410(c) provides that when seeking only production of business records for copying the subpoena must be directed to a custodian "qualified to certify the records." C.C.P. §2020.430 requires the "qualified person" to deliver the affidavit required by Evid. Code §1560. NOTE: the same affidavit requirement does not apply to a subpoena for both testimony and production.

Global Compliance v. American Labor Law   [NOT REPORTED Cal.App 2nd Dist. May 15,2006)   2006 WL 1314171, 2006 Cal. App. Unpub. LEXIS 4157.  Discovery sanctions affirmed. When a court denied sanctions due to the failure to provide a factual basis in support of the request as required by C.C.P. §2023, the court had inherent authority to deny without prejudice, to invite a new motion and to reconsider the denial, and to grant monetary sanctions. Citing "(LeFrancois v. Goel (2005) 35 Cal.4th 1094, 1107 [holding Code of Civil Procedure "sections 437c and 1008 limit the parties' ability to file repetitive motions but do not limit the court's ability, on its own motion, to reconsider its prior interim orders"]
"ALLC and Mango argue they should not have been required, at their expense, to provide the documents in the CD-ROM format, because that is not how their documents were "kept in the usual course of business[.]" (Code Civ. Proc., § 2031, former subd. (g)(1), now subd. (f)(1).) They do not dispute that the documents at issue were "kept" in their computer. A CD is simply a copy of the electronic data on the computer. Just as photocopying is proper for copying a document in paper form, downloading computer files onto a CD is an appropriate means for copying the electronic data on a computer's hard drive. Any right to reimbursement was waived by their failure to request that CPC pay for the CD(s)."

Volkswagen of America, Inc. v. Superior Court (Rusk) (2006) , 139 Cal.App.4th 1481.  "Are documents submitted to bankruptcy trusts by a plaintiff's attorney in support of claims for compensation for alleged asbestos-related injuries discoverable in similar litigation against another entity? We conclude that most such documents normally are, and shall issue a writ of mandate to correct an overly restrictive discovery order entered in the trial court."  The court applied the normal discovery relevance standard but remanded the case for further consideration as to specific items or categories within the requests. The court criticized the document response's lack of particularity of identification of withheld documents, despite a supplemental response, when the original was only objections; it suggested that production should be ordered when the request appears to contain some discoverable documents but the response is inadequate to identify and distinguish any that are not discoverable. It noted documents within Ev.C.§§1152, 1154 are not admissible but are discoverable since they may lead to admissible information. "Even under Evidence Code section 1119, which exempts mediation proceedings from being admitted into evidence or discovered, the use of a writing in a mediation does not preclude that document from being admitted or produced in discovery unless it was specifically prepared for use in the mediation. (Evid. Code, § 1120; Rojas v. Superior Court (2004) 33Cal.App.4th 407, 417)

O'Grady v. Superior Court (2006), 139 Cal.App.4th 1423, 2006 WL 1452685  A writ issued directing the trial court to enter a protective order sought by publishers of a website to prohibit discovery of sources or content of e-mails stored on a service providers servers "because (1) the subpoena to the email service provider cannot be enforced consistent with the plain terms of the federal Stored Communications Act[citations]; (2) any subpoenas seeking unpublished information from petitioners would be unenforceable through contempt proceedings in light of the California reporter's shield [citations]; and (3) discovery of petitioners' sources is also barred on this record by the conditional constitutional privilege against compulsory disclosure of confidential sources [citation]."
See also California Shellfish v. United Shellfish(1997), 56 Cal.App.4th 16, 23 [Plaintiff must serve at least one defendant to assure protection of adversarial interests and protect against abuse of the discovery process. Plaintiff argued it needed discovery to determine who to serve but court noted the greater protection provided for motions to perpetuate testimony and noted that this was the "minimum protection" required.]

FTC v. Ameridebt, Inc., (N.D.Ca. 2006),    2006 U.S. Dist. LEXIS 13687 A motion by a non-party to stay an order denying a motion to quash a subpoena based on estimated volume or attorney fee costs of review was denied. The non-party had been permitted to assert privileges by providing a log. "...the Court is skeptical that the volume is as great as his 'estimate,' and notes that the email could likely be screened efficiently through the use of electronic search terms that the parties agreed upon. The costs of compliance with subpoena for e-mail "...are quantifiable and, if appropriate, can be remedied by cost-shifting."

Kemper Mortg., Inc. v. Russell, (S.D.Ohio 2006), 2006 U.S. Dist. LEXIS 20729  Plaintiff's request for compensation for complying, pursuant to the advice of its own expert, with its duty to preserve was denied because "the Court believes that it is without authority to do so." "One of the unexpected costs of using the electronic tool is that it may become costly to abide by one's duty to preserve evidence, but that is not a cost which can be shifted to the opposing party, at least in the absence of a demand for a litigation hold which seeks court enforcement and/or requests for discovery which can limit the amount of information which needs to be preserved."

Tien v. Superior Court (Tenet Healthcare Corp.) (2006) , 139 Cal.App.4th 528.  Privacy of putative class member contacting counsel. By agreement, a sample of putative class member employees were invited to contact plaintiff's counsel and defendant sought the names etc. of those who did and plaintiffs sought a protective order. 24 of 82 objected to disclosure, some because they feared retaliation. The appellate courts affirmed the trial court's overruling of the attorney-client privilege objection because disclosure of names of persons contacting counsel "would reveal nothing confidential." The trial court did not mention but the appellate court overruled the work product objection holding "Plaintiffs' counsel was merely the passive recipient of some telephone calls. Therefore, the trial court's discovery order does not violate the attorney work product doctrine."
The trial court was reversed on privacy grounds: "... we conclude that the privacy rights ...outweigh Tenet's need for the discovery." The court noted that the "identity of persons who consult with counsel implicates their right of privacy" and that disclosure was not justified by a "compelling" need. The court also noted "if employees feel their employer will be informed whenever they contact an attorney suing the employer, many would be deterred from exercising their right to consult counsel."
"The court must consider the purpose of the information sought, the effect that disclosure will have on the affected persons and parties, the nature of the objections urged by the party resisting disclosure and availability of alternative, less intrusive means for obtaining the requested information. [Citation.] Based on an application of these factors, the more sensitive the nature of the personal information that is sought to be discovered, the more substantial the showing of the need for the discovery that will be required before disclosure will be permitted."[citation]

Fischer v, United Parcel Service Co   (E.D.Mich.2006 Slip Copy), 2006 WL 1046973. Discovery of search efforts  "Defendant produced the e-mail, but claims that it is unable to find the attachment. Plaintiff is unwilling to simply accept Defendant's claim and asked to depose someone familiar with Defendant's retrieval efforts. Plaintiff contends that the Magistrate's compromise order that Defendant make the appropriate person available for an informal telephone conference was not clearly erroneous or contrary to law." The district court judge affirmed the magistrate's decision. Note this informal procedure may not be proper under California law but the discovery of search efforts may be.

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Experian Information Solutions, Inc. v. Superior Court (2006), 138 Cal.App.4th 122.   4th Dist., Div 3 Class member contact after class certification restricted. Privacy of debtor identity & contact.  The identity of debtors and potential class members was provided to plaintiff pursuant to a stipulated protective order limiting the use of the information without a prior court order. The Court recognized the right to pre-certification communication with potential class members but noted a higher standard when state action such as the discovery process is involved. The right to conduct relevant discovery must be balanced against "the degree the recipients’ privacy interests are infringed and determine whether the letter sufficiently minimizes any such infringement." The trial court order approving a contact letter after class certification was denied was reversed and remanded for drafting of a new letter. The court held that "...the trial court must ...only approve a new proposed letter, if any, which satisfies the following conditions:
(1)there shall be nothing...advising the recipients of their possible legal rights...
(2)only statements...should be those necessary to request...written consents to be contacted by [plaintiff's] counsel in connection with her lawsuit
(3) the recipients’ consents...must be communicated to the third party through a written authorization signed by each...
(4) the letter must be written on the neutral third party’s letterhead, and must not identify Sorensen’s counsel or provide his contact information;
(5) the letter must contain a statement that the failure to submit a signed authorization means the recipient will not be contacted by Sorensen’s counsel; and
(6) the sentence in the current letter that “[t]he sending of this letter has been approved by Order of the Orange County Superior Court” must be deleted.

Hagenbuch v. 3B6 Sistemi Elettronici Industriali S.R.L 2006 WL 665005 (N.D.Ill.2006) TIFF rejected when Producing party elected to produce as maintained in the normal course. Producing party insisted inspection occur on site. After inspection, Requesting party wanted data produced in electronic form as maintained in normal course of business. Producer first wanted to print hard copies and ultimately provided TIFF images. The trial court rejected production of TIFF images and required production in the same electronic form as maintained in the business. The trial court rejected the need to bate stamp argument and noted that the "parties agree that, unlike the original electronic media, the TIFF documents do not contain information such as the creation and modification dates of a document, e-mail attachments and recipients, and metadata." "Plaintiff claims that the TIFF documents are inadequate reproductions that (1) lack clarity and color, (2) lack metadata that track when a document was created or modified and whether e-mails contained attachments and to whom they were sent, (3) lack clear indications as to where each document starts and stops (i.e., the TIFF pages all run together and make it difficult to determine which pages are part of one document), (4) lack clear indications as to which documents are stored together on the original compact discs and DVDs (i.e., over sixty original compact discs and DVDs were reduced to four compact discs containing TIFF documents), and (5) make it impossible for Plaintiff to use search terms to quickly and efficiently search through the documents electronically."

Bob Barker Company, Inc.. v. Ferguson Safety Products, Inc, 2006 WL 648674 (N.D.Ca.2006). Database access and production. The trial court denied production of a database "because it is unclear how a party could go about producing "a database," which ordinarily is a dynamic collection of data that changes over time. It denied without prejudice a request for access to the database in order to generate its own information or reports provided there was an "adequate showing of need, and with adequate procedural safeguards in place to minimize business disruption and to restrict disclosure of irrelevant or proprietary material

Treppel v. Biovail Corp. 233 F.R.D. 363, 2006 WL 278170 (S.D.N.Y. Feb. 6, 2006). Plaintiff in defamation action sought various discovery orders including a preservation order. The court noted 3 judicial approaches in federal courts for issuing preservation orders: (1) the injunction standard requiring a showing of irreparable damages and likely success on the merits; (2) the balancing approach considering all facts and such factors as the concern that relevant evidence would be lost, irreparable harm and the ability and cost of preservation [see Capricon Power case]; and (3) the standard of necessary and not unduly burdensome. The Court applied the balancing test and denied the protective order since there was no showing of danger of destruction or loss of relevant evidence absent such order and no showing that the order would not be unduly burdensome while the proposed order appeared to be so on its face. The Court recognized the possibility of shifting some or all costs of preservation but did not reach the issue.
The Court ordered answers to inquiries re document retention and storage.

The Court addressed the search obligation of a party responding to document requests stating "...it must conduct a diligent search, which involves developing a reasonably comprehensive search strategy. Such a strategy might, for example, include identifying key employees and reviewing any of their files that are likely to be relevant to the claims in the litigation." A Responding party need not search "every scrap of paper." A requesting party need not agree to search terms and scope. "Absent agreement ...about a search strategy, [responding party] should have proceeded unilaterally, producing all responsive documents located by its search. It shall now do so promptly. In addition, [responding party] shall provide the plaintiff with a detailed explanation of the search protocol it implements."

Best Buy Stores, L.P. v. Superior Court (Boling) (2006) , 137 Cal.App.4th 772,   40 Cal.Rptr.3d 575     Precertification discovery to locate class representatives.  A lawyer filing a class action on its behalf is allowed to conduct precertification discovery to ascertain the names of potential substitute class representatives (see also Budget Finance Plan v. Superior Court (1973), 34 Cal.App.3d 794) but the procedure and letter sent must protect their privacy. A third party sent letters to 200 potential class members informing them of the action and permitting them to respond and participate. An independent administator received responses and advised Best Buy as to those responses for purposes of complying with the discovery inquiry. The appellate court added privacy provisions: "The letter must state that recipients are free to ignore the letter and that, if they do so, the sender will not disclose {Slip Opn. Page 8} their identities to [the attorney]. The letter should not identify [the attorney] by name, should not provide that the recipient contact [the attorney] in the first instance, and should not contain any information that would facilitate such direct contact. The court should instruct the sender of the letter to disclose to [the attorney] the identity of only those persons who affirmatively request this be done in a writing signed by the person."

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In re Vee Vinhnee, 2005 WL 3609376 (9th Cir.BAP (Cal.),2005) Admissibility of computer business records. The proponent of evidence failed to submit sufficient evidence to authenticate records and satisfy the the requirements business records exception to the hearsay rule. The court suggested that prior cases admitting computer records may not have required sufficient showings of their trustworthiness and that admissibility requires more detailed foundation to satisfy the question of what has, or may have, happened to the computer record in the interval between creation and trial. The court suggested testimony as to the following:

policies and procedures for the use of the equipment, database, and programs
how access to the pertinent database is controlled
how access to the specific program is controlled
how changes in the database are logged or recorded
structure and implementation of backup systems
audit procedures for assuring the continuing integrity of the database

The court also suggested additional inquiry on subjects to verify the accuracy and integrity of data

the mode of record preparation
programming errors
completeness of data entry
mistakes in output instructions
damage and contamination of storage media
power outages, and equipment malfunctions
improper search and retrieval techniques, data conversion, or mishandling during discovery
that the computer used is the standard acceptable type
that business is conducted in reliance upon the accuracy of the computer in retaining and retrieving information."

The court referred to an "eleven-step foundation for computer records:

1. The business uses a computer.
2. The computer is reliable.
3. The business has developed a procedure for inserting data into the computer.
4. The procedure has built-in safeguards to ensure accuracy and identify errors.
[The court suggested details regarding computer policy and system control procedures, including control of access to the database, control of access to the program, recording and logging of changes, backup practices, and audit procedures to assure the continuing integrity of the records.]
5. The business keeps the computer in a good state of repair.
6. The witness had the computer readout certain data.
7. The witness used the proper procedures to obtain the readout.
8. The computer was in working order at the time the witness obtained the readout. 9. The witness recognizes the exhibit as the readout.
10. The witness explains how he or she recognizes the readout.
11. If the readout contains strange symbols or terms, the witness explains the meaning of the symbols or terms for the trier of fact. "
citing EDWARD J. IMWINKELRIED, EVIDENTIARY FOUNDATIONS § 4.03[2] (5th ed.2002)

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Hecht, Solberg, Robinson, Goldberg & Bagley v. Superior Court (Panther) (3/9/ 06) ,137 Cal. App. 4th 579 2006 Cal. App. LEXIS 316 Discovery of financial information from non-party relevant to issue in case.  Real estate transactions resulted in a law suit including claims against the real estate attorneys. The real estate attorneys asserted a statute of limitations defense and moved for summary judgment. The case against them was settled. Plaintiff then sued the attorneys handling the case against the real estate attorneys for malpractice, apparently based on a failure to timely sue the prior lawyers which allegedly gave rise to the statute of limitations defense and a low settlement. Plaintiff sought financial information from the non-party real estate attorneys to show that damages in the underlying action would have been collectible from them. The real estate partnership, which was not a party to the malpractice case, asserted privacy and relevancy objections. The trial court granted the discovery of financial information, limited in time and subject to a protective order [ "standard protective order which appropriately imposes confidentiality and restricts the availability of the documents produced to the use of the court, the named parties and their attorneys, and expert consultants or litigation personnel."] The appellate court affirmed finding no abuse of discretion and that the trial court had appropriately balanced the discovery of relevant information against privacy interests. It assumed without deciding that a partnership had such privacy interests.
The court also held that "...the liability insurance policies are discoverable 'to avoid a situation where any party argues language in the policy precludes coverage in this matter.'.... It is not an answer for the Petitioner Firm to suggest that a deposition of its managing partner be taken to disclose the insurance policy amounts, or the extent of coverage, because the insurance policies themselves may lead to admissible evidence about the extent of coverage provided and whether coverage would have been contested. Production would also avoid hearsay problems and secondary evidence problems."
The court noted the lack of "...any requirement of a bifurcated proceeding, in which a complete showing of liability must be made before any damages inquiry or financial discovery can be conducted. (Compare Civ. Code, § 3295, subd. (c) [regarding proof of financial condition for punitive damages].) We need not and cannot create such a scheme by judicial decision." NOTE case law re protective orders regarding financial financial privacy before the enactment of Civil Code 3295 that achieved a similar result of delay until evidence produced on merits.

Failure to properly conduct discovery regarding electronic data can lead to huge malpractice claims against any law firm. Coleman (Parent) Holdings Inc. v. Morgan Stanley, Inc., 2005 WL 674885 (Fla.Cir.Ct., 2005.)  (Fla. Cir. Ct. Mar. 1, 2005)   A Florida circuit court determined Morgan Stanley had failed to preserve and produce e-mails and essentially imposed sanctions establishing the factual allegations in the complaint. The Court also imposed monetary sanctions and revoked the pro hac vice admission of counsel. See also the earlier opinion at  2005 WL 679071. A $1.4 billion judgment was enterred and the Wall Street Journal reported on May 16, 2005 that notice of malpractice claim had been given. Morgan Stanley has appealed but the lesson to lawyers and parties remains: failure to properly conduct discovery regarding electronic data can lead to huge malpractice claims against any law firm.

In Re: Priceline.com Inc., Securities Litigation (D.Conn.2005), 2005 U.S. Dist. LEXIS 33636 The Court provided guidelines for production when it was anticipated that expensive restoration and production of back-up tapes was required and cost shifting was a potential issue. It suggested it would expect justification of the need for discovery and the of the costs incurred. It required monthly progress reports to monitor the progress and suggested it would rule periodically on such things as cost shifting.  See E-Discovery New Developments for more details.

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Electronic Funds Solutions v. Murphy (2005),134 Cal.App.4th 1161, 36 Cal.Rptr.3d 663  Terminating discovery sanctions were affirmed but judgment in excess of the amount requested in complaint was reversed.
Terminating sanctions appear to have been based on the destruction of evidence on a computer hard drive after the court ordered its production and warned of more severe sanctions. The data was destroyed by using Data Eraser to wipe the hard drive after the order to produce but before production. The erasure of data also appeared to be a violation of a prior order requiring production of all requested data including e-mail contained on the hard drive. Because of the history of thwarting discovery, and of requiring motions, orders and the imposition of monetary sanctions on prior motions, the court was not required to impose a lesser sanction. In upholding terminating sanctions, the court stressed its limited review standard and the record of abuse to conclude a lesser sanctions might not be adequate to remedy the abuse.

"Dismissal is a proper sanction to punish the failure to comply with a rule or an order only if the court's authority cannot be vindicated through the imposition of a less severe alternative. [Citations.] For instance, when the rule or order violated concerns discovery, the trial court may impose sanctions that '"'are suitable and necessary to enable the party seeking discovery to obtain the objects of the discovery he [or she] seeks but the court may not impose sanctions which are designed not to accomplish the objects of the discovery but to impose punishment.'"'" (Rail Services of America v. State Comp. Ins. Fund (2003)110 Cal.App.4th 323, 331-332.) In other words, discovery sanctions exist {Slip Opn. Page 30} "not to provide a weapon for punishment for past violations or penalty for past conduct but to secure compliance with orders of the court." (Welgoss v. End (1967) 252 Cal.App.2d 982, 992.
***
"Given defendants' brazen violation of a discovery order in the face of an express warning that terminating sanctions could be issued, the trial court could have reasonably concluded a lesser sanction would not have been sufficient to compel compliance and that terminating sanctions were necessary to provide plaintiffs' with the due process to which they were equally entitled."

"In the complaint, plaintiffs sought damages 'in an amount in excess of $50,000.' Defendants contend the complaint thus limited recoverable compensatory damages to $50,000. We agree." The $24 mil. judgment was based upon a "statement of damages" requesting over $8 mil. compensatory and $16 mil punitive damages "Because the complaint in the present case did not seek damages for personal injury or wrongful death, plaintiffs' statement of damages fails to provide the formal notice required before plaintiffs may obtain compensatory damages exceeding the amount requested in the complaint. Consequently, we must reverse the judgment." Alternatively, the court permitted plaintiff to amend the complaint to seek greater damages but the default would be set aside.

Hopson v. Mayor and City Council of Baltimore (D.Md.,2005), 232 F.R.D. 228, 2005 WL 3157949, 2005 U.S. Dist. LEXIS 29882 Although the only ruling required the parties to meet and confer, the court addressed a major discovery issue compounded by the volume of electronic documents: full review by a lawyer and particularized assertion of privilege as to each document can result in huge costs and unacceptable delay in discovery while review takes place. The Court suggested a procedure whereby the parties would propose an acceptable review procedure, reasonable under all relevant circumstances, that would be reviewed by the Court. If approved upon independent review, the Court would order production subject to that reasonable but limited review and would provide that any revelation of privileged documents pursuant to that production order would not constitute a waiver of privilege since production would be compelled by court order. First, the Court noted the impropriety of serving boilerplate, general objections and of claiming burden without supporting it with a factual declaration quantifying the burden and cost.

"...objections, however, were boilerplate, general objections, rather than specific ones, as required by Fed. R. Civ. P. Rule 33(b)(4) and Rule 34 See Hall v. Sullivan, F.R.D. , 2005 WL 2621903 (D. Md. Oct. 11, 2005)."

Second, it noted the danger posed by the proposed federal rules 26(f) and 16 that suggest parties reach an agreement that disclosure would not constitute a waiver.

"Absent a definitive ruling on the waiver issue, no prudent party would agree to follow the procedures recommended in the proposed rule. And, as already noted, parties, with the apparent encouragement of courts, have been using these procedures even in advance of the adoption of rule changes authorizing them."

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Menke v. Broward County School Bd.  916 So.2d 8, 2005 Fla. App. LEXIS 15291,  2005 WL 2373923