Court of Appeal of Louisiana Affirms Denial of Injunction to Preserve Online Data Providers Offers t

Yesterday, the Court of Appeal of Louisiana issued a decision, Matthew Morris & Complete Constr. Contrs. v. Trust Techs.​ No. 2018 CA 0831, 2019 La. App. LEXIS 372 (La. Ct. App. Feb. 28, 2019) affirming the decision of the trial court in denying a preliminary injunction that would have prevented the defendants from denying the plaintiffs the use of computer data.

Trust Technologies had hosted data for CCC, and was instructed by the authorities to preserve data after a warrant was issued for the search of computer data in the Baton Rouge office of CCC pursuant to a contractual fraud investigation. Trust Technologies was instructed by law enforcement not to transfer ShareSync data (ShareSync is a service that allows files to be shared across desktops and mobile devices.) Trust Technologies did provide CCC a drive with its data, and offered to maintain the ShareSync account for a year for a fee. Only Trust Technologies could delete data from the ShareSync accounts. CCC's petition for a preliminary injunction and temporary restraining order asserted that if the accounts were shut down this would result in the spoliation of evidence needed in civil and criminal proceedings. The TRO was granted, but the trial court denied the preliminary injunction.

On appeal, the Plaintiffs contended that the deletion of the data would destroy metadata needed for their defenses, and complained about having to pay a 'ransom' to preserve the data. The Court of Appeal held that, "The record shows that the plaintiffs have neither been denied access to the ShareSync data, nor were they ever threatened by the defendants that their data would be destroyed." Id. at *9. The decision notes the offer to maintain the account and Trust Technologies' assertion that metadata could be preserved by another information technology provider. The Court noted that denying custodial access to the ShareSync account to the Plaintiffs would prevent them from destroying the data, which is what the authorities want to prevent.

The Court refused to review the Plaintiffs' contention that denying them access to the metadata is a seizure in violation of the Fourth Amendment since this issue was not raised before the trial court.

District of South Carolina: Forensic Protocol Granted Where Mobile Devices Returned in 3 Hours

On Friday, Judge Timothy M. Cain, issued a decision, Indus. Packaging Supplies v. Davidson, No. 6:18-0651-TMC, 2019 U.S. Dist. LEXIS 28143 (D.S.C. Feb. 22, 2019), granting in part and denying in part a Motion to Compel the Entry of a Forensic Protocol filed by the Plaintiff. This case concerns this misappropriation of trade secrets and proprietary information by former employees of IPS.

The Plaintiff's forensic expert submitted an affidavit stating that the Defendants sent some electronic files to external devices. The proposed protocol would require the Defendants to make these devices available for preservation, but allow them to have a representative present during this process. Search terms used to look for data on the devices had to be agreed to by both sides or approved by the Court. The Defendants countered that they had already searched for the relevant information, and that the search would violate their privacy, and could be obtained by other means.

The Special Master appointed in the case ruled that the Defendants should comply with the protocol but the search terms should be narrowly tailored to exclude irrelevant data; disputed terms were to be excluded; and the searches related to two particular Defendants end at the time their employment did.

Judge Cain noted the proportionality discovery standard of Federal Rule of Civil Procedure 26(b)(1), and Federal Rule of Civil Procedure 34(a), which allows a party to request ESI stored on any medium from which the information can be obtained, but which also states that such requests may raise privacy concerns. He concluded that the protocol would not unnecessarily intrude upon the Defendants' privacy because specific devices and search terms were identified and since "mobile devices are to be returned within three hours; and the data preservation is to be scheduled and carried out in a manner to cause the least disruption to Defendants" Id. at *10.

N.D. Cal. - ESI Discovery Not Proportional From Custodians Who Only Had an Interest in Trade Secrets

Yesterday, Judge Virginia DeMarchi issued a order on a discovery dispute concerning the search for responsive ESI in the files of 33 of the defendant's data custodians. See, Alta Devices v. LG Elecs., No.18-cv-00404-LHK (VKD), 2019 U.S. Dist. LEXIS 27102 (N.D. Cal. Feb. 20, 2019). Alta alleges in this case that LGE misappropriated its trade secrets.

LGE contended that Alta's request was not proportional to the needs of the case, because some of the custodians were not directly connected to the events at issue. It argued that collecting the data would be burdensome because of its location and the number of custodians involved. In addition it invoked the apex doctrine pronounced in Apple Inc. v. Samsung Electronics Co., Ltd., 282 F.R.D. 259, 263-64 (N.D. Cal. 2012). This doctrine states that discovery can only be conducted for high level executives if they have unique knowledge of facts, and other discovery methods have been exhausted.

Judge DeMarchi agreed that discovery from 33 custodians would not be proportional. "Based on Alta Devices own discussion of relevance, it appears that the several of the proposed LGE custodians are on Alta Devices' list because they expressed interest in or requested information, and not because there is a factual basis to believe they actually obtained, used, or disclosed Alta Devices' trade secret information." Alta Devices, 2019 U.S. Dist. LEXIS 27102, at *2.

Discovery was restricted to 10 custodians, including only those custodians who had some involvement in the issues at hand other than expressing an interest in them by setting up a meeting. The Court also found that the senior executive status of certain custodians was not a reason to exclude them from discovery.