This post examines issues that arose in a civil suit filed
in an Ohio court: Fasteners For Retail, Inc. v.
DeJohn, 2014 WL 1669132
(Ohio Court of Appeals 2014). I decided
to do a post on this case because it raises some interesting issues on
“electronic discovery.” As Wikipedia
explains, in the United States “discovery” is the
pre-trial phase in
a lawsuit in which each party, through the law of civil
procedure, can obtain evidence from the opposing party by means of discovery
devices including requests for answers to interrogatories, requests for
production of documents, requests for admissions and depositions. Discovery can
be obtained from non-parties using subpoenas. When discovery requests are
objected to, the requesting party may seek the assistance of the court by
filing a motion to compel discovery.
As I have noted in earlier posts, and as this report
explains in detail, a similar discovery process takes place in criminal
prosecutions at the state and federal levels.
That brings us back to Fasteners For Retail, Inc. v. DeJohn. The
Court of Appeals begins its opinion by explaining that
[t]his appeal arises from a lawsuit
filed by [Fasteners for Retail] FFR in an unrelated matter in the United States
District Court for the Northern District of Illinois. See Fasteners for
Retail v. Anderson, 2011 U.S. Dist. LEXIS 124937 (U.S. District Court for the Northern District of Illinois 2011). FFR, a company engaged in selling
products used in retail shelving displays, brought suit against K International
(`KI’) and Gerald Andersen alleging patent infringement, false advertising,
misappropriation of trade secrets, and other claims. KI filed a counterclaim,
alleging false patent marking and other claims. During the course of the
Illinois litigation, FFR learned DeJohn, who had worked as FFR's vice president
in charge of sales until his termination on March 12, 2008, performed
consulting work for KI. FFR also learned that Kump, who had worked as FFR's
vice president for new market development until his termination on October 24,
2009, also performed consulting work for KI. . . .
[O]n
July 12, 2012, FFR filed suit against DeJohn and Kump in the Cuyahoga County Common Pleas Court. In relevant part, FFR alleged DeJohn and Kump had breached
the confidentiality and nondisclosure provisions of their employment
agreements, misappropriated trade secrets, and engaged in unfair competition;
Kump breached his noncompete agreements; and DeJohn tortiously interfered with
Kump's contract with FFR. DeJohn and Kump filed answers denying liability and
also filed counterclaims asserting breach of contract, abuse of process, and
unfair competition.
Fasteners For Retail, Inc. v. DeJohn, supra.
In October of 2012,
FFR “FR sought discovery from DeJohn and Kump but they “did not fully comply
with FFR's request”. Fasteners For
Retail, Inc. v. DeJohn, supra. FFR
then “filed a motion to compel in which it said DeJohn and Kump filed
incomplete responses to a number of interrogatories.” Fasteners
For Retail, Inc. v. DeJohn, supra. DeJohn and Kump then moved to strike the
motion to compel “because it was not signed by counsel”, i.e., had apparently
not been signed by FFR’s lawyer. Fasteners
For Retail, Inc. v. DeJohn, supra.
They also claimed it
“was overbroad,” “indicated . . . they had no list of FFR customers” and
claimed neither of them “had disclosed FFR's confidential information.” Fasteners
For Retail, Inc. v. DeJohn, supra. DeJohn and Kump also filed their own
request for discovery from FFR, and then filed their own motion to compel FFR
to comply with their requests.
Fasteners
For Retail, Inc. v. DeJohn, supra.
On December 26, 2012, FFR filed a motion for
electronic discovery, asserting that
the parties `have been unable to agree upon the parameters of discovery.’ FFR
proposed that defendants produce `any relevant computer hard drives and
electronic media’ for FFR's review, and from that review a list of search terms
would be derived. . . . FFR would [then] `produce pursuant to a protective order
a subset of documents concerning the information FFR contends constitutes
Confidential Information.’ In opposition, defendants asserted that it would be
unfair to order defendants to provide discovery to FFR before FFR provided any
discovery to defendants.
Fasteners For Retail, Inc. v. DeJohn, supra.
On March 27, 2013,
FFR filed an amended complaint which
added [Bruce] Hrvatin and KI as new
party defendants and alleged that DeJohn, Kump, and Hrvatin breached their
employment agreements, misappropriated trade secrets, and engaged in unfair
competition; that DeJohn tortiously interfered with Kump's employment; and that
Kump and DeJohn fraudulently induced FFR to enter into severance agreements.
Fasteners For Retail, Inc. v. DeJohn, supra.
The litigation
dragged on, with motions and a pretrial hearing, until July 12, 2013, when
FFR
filed a motion to compel defendants to comply with discovery and for production
of their computer hard drives. FFR asserted that defendants have `engaged in knowingly
evasive and even perjured testimony, and potentially even the spoliation of
critical evidence.’ In support of this motion, FFR asserted that there are `mounting
signs’ that `[d]efendants purposely destroyed relevant electronic information.’
FFR
asserted that DeJohn stated that he experienced computer problems that
prevented him from retrieving all of his emails, and Kump had the hard drive on
one of his computers replaced one day before this matter was filed. FFR also
asserted that DeJohn wrote `Hello men’ on a number of emails with two
recipients who are employees of FFR, but `FFR has received more of the chain,’
thus suggesting a larger email chain existed. FFR also submitted evidence that
its expert, Mark Lanterman, had developed an electronic discovery protocol that
has successfully been used by attorneys for years.
Fasteners For Retail, Inc. v. DeJohn, supra.
The defendants argued that FFR
should not be given unfettered access
to their computers since FFR already had access to all of the email sent to FFR
from its own servers, in addition to all of the information obtained in the
Illinois litigation.
Moreover, defendants argued, FFR had
not shown that the defendants revealed any confidential information.
Fasteners For Retail, Inc. v. DeJohn, supra.
On August 9, 2013, the judge issued this order: “Kump, DeJohn, and Hrvatin are
hereby ordered to produce electronic discovery and the computer hard drives by
9/3/13.” Fasteners For Retail, Inc. v.
DeJohn, supra. The
defendants appealed the order, which is how this issue came before the Court of
Appeals. Fasteners For Retail, Inc. v. DeJohn, supra. The defendants/appellants made three
arguments in their appeal:
I.
The trial court erred because its order compels production of irrelevant,
privileged and confidential information and imposes an undue burden on
Appellants.
II. The
trial court erred in ordering forensic imaging of Appellants' computer hard
drives because Appellee failed to demonstrate what it must [do] to warrant that
degree of intrusion, disruption, and invasion.
III.
The trial court erred in issuing the discovery order because it fails to
include any protocols and procedures and because it fails to adequately protect
Appellants' privileged and confidential electronically-stored information.
Fasteners For Retail, Inc. v. DeJohn, supra.
The Court of Appeals
began its analysis of the arguments by noting that under Ohio Rule of Civil
Procedure 26(B)(1), the scope of discovery in a civil suit encompasses “`any
matter, not privileged, which is relevant to the subject matter involved in the
pending action, whether it relates to the claim or defense of the party seeking
discovery or to the claim or defense of any other party’”. Fasteners For Retail, Inc. v. DeJohn, supra. It also noted that it would review the
correctness of the court’s discovery order and the imposition of “forensic
imaging . . . as a sanction” under an abuse of discretion standard. Fasteners
For Retail, Inc. v. DeJohn, supra.
The Court of Appeals
noted, first, that “[f]orensic imaging of a computer's hard drive creates a
mirror image that replicates bit for bit, sector for sector, all information on
the hard drive, including embedded, residual, and deleted data.” Fasteners
For Retail, Inc. v. DeJohn, supra. It then explained that under another
Court of Appeals’ decision in Bennett v.
Martin, 186 Ohio App.3d 412, 928 N.E.2d 763 (Ohio Court of Appeals 2009),
courts
are generally reluctant to compel such forensic imaging of a hard drive `largely
due to the risk that the imaging will improperly expose privileged and
confidential material contained on the hard drive.’ Bennett
v. Martin, supra. For that reason, and . . . to guard against undue
intrusiveness to a party's privacy and confidentiality, the Bennett court established a two-part
procedure to determine whether forensic imaging is warranted. . . . Bennett v. Martin, supra.
First,
the trial court must weigh the parties' interests in obtaining the discovery
against privacy concerns. Second, the trial court must set forth a protective
protocol to ensure forensic imaging is not unduly intrusive. Bennett v. Martin, supra.
Fasteners For Retail, Inc. v. DeJohn, supra.
The Court of Appeals found that the record in this case did
not demonstrate the
requisite showing of defendants'
noncompliance with discovery as mandated under the first portion of the Bennett
procedure. The record demonstrates that FFR was noncompliant with
defendants' request for production of documents during the course of
litigation. FFR also conceded that the parties `failed to reach agreement on
terms of a stipulated protective order creating a standstill in discovery.’ In
addition, FFR sought detailed electronic discovery as early as October 2012, or
prior to its filing of any motion to compel discovery.
Moreover, under FFR's proposal,
defendants would produce `any relevant computer hard drives and electronic
media’ for FFR's review, then upon [their] compliance, FFR would `produce
pursuant to a protective order a subset of documents[.]’ At this time, however,
there is no evidence in the record that FFR has fully complied with discovery,
and FFR has already received extensive records from the Illinois litigation.
Fasteners For Retail, Inc. v. DeJohn, supra.
The court also noted
that the record of the litigation in the case to this point did not “demonstrate
that the documents FFR sought were being unlawfully withheld and not available
from FFR's own information or other sources.”
Fasteners For Retail, Inc. v.
DeJohn, supra. So, since “the showing required under the first portion of
the Bennett analysis [was] not met”,
the Court of Appeals found DeJohn’s and Kump’s first two arguments were “well
taken.” Fasteners For Retail, Inc. v. DeJohn, supra.
The Court of Appeals
then took up the second Bennett
procedure: a protective protocol. Fasteners For Retail, Inc. v. DeJohn, supra. This was Dejohn’s and Kump’s third argument
on appeal, as noted above. Fasteners For Retail, Inc. v. DeJohn, supra.
The court began its
analysis of this argument by noting that
[w]ith
regard to the second part of the procedure, the Bennett court
clearly held that `the failure to produce discovery as requested or ordered
will rarely warrant unfettered access to a party's computer system,’ and that `a
court must protect the defendant's confidential information, as well as
preserve any private and privileged information.’ Bennett v. Martin, supra. The Bennett court then
outlined a protocol for discovery:
`[A]n independent computer expert, subject to
a confidentiality order, creates a forensic image of the computer system. The
expert then retrieves any responsive files (including deleted files) from the
forensic image, normally using search terms submitted by the plaintiff. The
defendant's counsel reviews the responsive files for privilege, creates a
privilege log, and turns over the nonprivileged files and privilege log to the
plaintiff.’
Fasteners For Retail, Inc. v. DeJohn, supra.
The Court of Appeals
then held that
[u]nder
the second portion of the Bennett procedure, a trial court
abuses its discretion when its judgment entry permits unfettered forensic
imaging of a party's electronic devices, and contains none of the Bennett protections
required to conduct such forensic analysis. . . .
In this
matter, the record does not contain the protective protocol required under Bennett. Therefore,
DeJohn and Kump's third assignment of error is well taken. The trial court
abused its discretion in ordering forensic imaging of appellants' computer hard
drives.
Accordingly,
the judgment is reversed and remanded for further proceedings consistent with
this opinion.
Fasteners For Retail, Inc. v. DeJohn, supra.
So, the trial judge
will presumably either not order the forensic imaging or, if he/she does order
imaging, will (i) make the necessary findings to justify that step under the Bennett case and (ii) establish the
protective protocol also required under Bennett.
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