Applying the principle of proportionality to preservation of electronically stored information (ESI) is gaining traction, as witnessed by recent court opinions, thought leadership and even proposed amendments to the Federal Rules of Civil Procedure. Sometimes application of this principle results in the denial of spoliation sanctions even where a failure to preserve has been established. However, precedential appellate decisions in e-discovery are still rare. In addition, opinions addressing technologies communications such as texting and hardware such as mobile devices have been addressed by very few cases. The recent appellate opinion in PTSI, Inc. v. Haley et. al. is a rare e-discovery case because it is an appellate decision that involves texting, smartphones and the principle of proportionality as applied to preservation.
Employment cases involving the alleged theft of trade secrets commonly include requests by employers for ESI, which employers hope will contain the smoking gun consisting of or pointing to stolen secrets. In PTSI, the Superior Court of Pennsylvania affirmed summary judgment against PTSI (the employer) in just such a case. In its appeal, PTSI argued, inter alia, that the lower court erred when it denied PTSI spoliation sanctions. The appeals court rejected this argument.
The trial court issued a preservation order, an unusual step in that it generally requires a heightened showing akin to that required to sustain a preliminary injunction. Such an order is redundant in that it emphasizes an existing already existing duty to preserve relevant information. See, Cohen and Lender, Electronic Discovery: Law and Practice (Wolters Kluwer, 2d. Ed.), Chapter 2. PTSI claimed that its former employees violated the preservation order by deleting text messages and other ESI from phones and computers. Despite the plaintiff’s protestations to the contrary, the trial court found that “the level of importance and complexity of the issues did not weigh in favor of imposing sanctions and that the deleted material was not relevant or important to its decision.”
In Pennsylvania, stated the court, spoliation is only an issue where there has been intentional destruction of relevant evidence. One of the classic conundrums of spoliation cases is how to prove the relevance of ESI that no longer exists. The appeals court found that based on the relevant time period for the case, the lost ESI could not have been relevant. Moreover, the court observed that “[p]eople regularly delete electronically stored information and other things every day that are not evidence relevant to pending or foreseeable litigation even though the content cannot be specifically shown.” It characterized the destruction of ESI in this case as “innocent clean up of personal electronic devices.”
PTSI is an interesting and instructive case not only because of the court’s indication that proportionality principles should be applied to preservation, but because the type of ESI under scrutiny was text messaging on smartphones. The defendants “routinely” deleted their text messages “so as not to unduly encumber their iPhones.” The court saw routine destruction of such content as entirely reasonable, dangerously venturing into technical ground in stating that “[b]ecause of the volume of text messages that are frequently exchanged by cell phone users and the limited amount of storage on cell phones, it would be very difficult, if not impossible, to save all text messages and to continue to use the phone for messaging.”
In addition to the finding that there was an innocent motive for the destruction, the court found that substantially similar information was available from other custodians and accessible with less burden and difficulty:
“The record reveals that during the course of e-discovery there were more than one thousand (1,000) emails exhumed from [Haley's and Piroli's] computers by the forensic examiner, which were carefully reviewed by [defense] counsel for detection of any relevant evidence. Most of the e-mails were determined by counsel to be either purely personal, privileged, or not relevant to this lawsuit. Moreover, upon turning over the Piroli e-mails to [PTSI's] counsel, [defense] counsel justifiably complained that [PTSI] was engaging in a “fishing-expedition” which had risen to the level of “burdensome, expensive and time-consuming discovery which serves no legitimate purpose.”
eDiscovery presents many challenges due to the fact that case law in certain areas is still nascent. Lawyers are uncertain how far they have to go and what costs they have to incur in order to preserve ESI. This uncertainty extends to, among other things, the scope of the relevant time period, the types of communications that need to be preserved and what sources of data need to be considered as within scope of preservation duties. The PTSI case is instructive on all of these questions and is all the more helpful because of the precedential nature of the opinion, at least in Pennsylvania.
The views expressed are those of the author and do not necessarily represent the views of Ernst & Young.