244 F.R.D. 614 (D. Colo. 2007)

.Cache La Poudre Feeds, LLC

v.

Land O’Lakes Inc.

PartiesPlaintiff

Cache La Poudre Feeds, LLC

Family owned livestock and feed business

Since March 1991 it has used its Profile trademark and sold Profile products in several states

Claims in 2001 Land O’Lakes began using the same trademark

Defendants

Land O’ Lakes, Inc. $ 6 Billion dollar

conglomerate entity One of the largest producers

of butter and cheese in the country

40 local file servers at main office and other servers IT Director states since 2002

it has managed over 400 servers with backup daily, weekly for 5 weeks, monthly for a year, and annually forever

FACTS

April 4, 2002: P’s counsel, Ms. Anderson-Siler telephones D’s counsel Mr. Janzen. Mr. Janzen is told an individual in Colorado had been using “ Profile Showcase” as trademark for

animal feeds since 1990 and in 2002 that “individual filed an intent to use application in 2000 that was abandoned in 2001 for failure to respond .”

June 5, 2002 : P ‘s counsel wrote to Janzen to follow-up: This letter implied client preferred and was willing to explore a negotiated resolution. In addition, letter had two purposes as follow:

To clearly put D on NOTICE of P’s trademark rights. (P claims duty to preserve was triggered here). To determine whether this situation could be resolved without litigation and media exposure

The Court does not support P’s position

June 3, 2003: D’s outside counsel contacted Ms. Anderson-Siler “ to explore the possibility of obtaining a consent from your (her) client to register” the LAND OF LAKES PROFILE Trademark mark for agricultural animal feed.

June 17, 2003: A response letter from Ms Anderson-Siler expressed concern …BUT indicated her client “would be willing to listen what Land O’ Lakes would propose.”

The Court recognize under different circumstances, a demand letter alone may be sufficient to trigger

obligation to preserve evidence and support subsequent spoliation sanction—NOT HERE Letter MUST be more explicit and less equivocal- 2002-2003 letters did not threaten litigation or

demand preservation

Facts : P SUES D 2/24/2004 P files motion that D Destroyed Relevant Evidence: D’s failure to

discontinue the practice of deleting emails and overwriting backup e media after 4/2002

P claims D engaged in Post Filing Discovery Misconduct: D Cleans ex-employee hard drives and fails to monitor litigation hold

In response to the discovery request D produces over 50,000 pages of documents, 415 e-mails related to PROFILE, and compact disks regarding PROFILE products.

D’s places Litigation hold on Land O’Lakes it was believed employees understood to save ESI: It included ESI from current employees and printed documents from ex-employees who left the

company after Feb., 2004. No attempt was made by attorneys to find e versions of documents prepared by ex-employee’s.

(IT department cleaned hard drives after ex employees left company) The collected ESI was turned over to outside counsel for review per Rule 33. Defendant’s General Counsel Janzen confirmed employees understood and produced all materials:

Janzen relied on employee’s ability to locate responsive documents and gave them discretion Never reviewed 400 backup tapes ( 2001-2005)-Janzen understood tapes kept for 10 days No back up tapes for ex - employee hard drives, Janzen not aware of monthly and annual backup

tapes, Janzen believed not necessary to review that back up tapes were easily and readily accessible If there was restoration of back up tapes (each tape restored, searched = 4000 man hours!)

The Court Held: Duty to Preserve triggered upon litigation

Expungement of ex employee hard drives was a violation.

D was less than thorough in discharging duty to implement adequate steps to insure discoverable information would be preserved

Once a litigation hold has been established a party can’t continue a routine that potentially relevant and available information is no longer “ reasonably accessible” under Rule 26(b)(2)(B)

General Counsel took no independent action to verify completeness of document production

July 7 letter “made every effort to produce . . . all relevant information.” (?)

SANCTIONS Ps ability to litigate not prejudiced BUT

D failure to preserve potentially relevant hard drives and counsels’ failure to properly monitor the discovery process had interfered with the judicial process

Court awards $5000 to Cache LA Poudre LLC to reimburse legal fees and expenses incurred by Janzen’s deposition as well as court reporter, travel expenses

Federal Discovery Rules Rule 26:Duty to Disclose

Rule 26(b)(2)(B) limitations of discovery based on inaccessibility of undue burden or costs

Rule 26(f) Conference for Parties planning discovery

Rule 26(g)(2): Litigation Hold without more will not satisfy reasonable inquiry that client has provided all available information and documents

Rule 33. Interrogatories to Parties Rule 33(b) Answers and ObjectionsRule 34. Producing Documents, ESI . . . Rule 34(b)(1)(A) … must describe with reasonable particularity each item or category of items to be inspected

Rule 37. Failure to Make Disclosures or to Cooperate in Discovery; Sanctions

Court looks at:

Is data relevant to issue ?

If so, when is duty to preserve triggered?

If misconduct? Are sanctions appropriate?

The Court held: No duty to preserve before litigation and no sanctions predicated on omissions or actions before 2/24/2004.

Rationale : The delay coupled with less than adamant letters , and the tone of letters belies contention that D should have anticipated litigation

* The duty to preserve must be predicated on something more than equivocal statement of discontent

*Unrealistic to expect parties to stop routine operations as soon as they anticipate litigation

Expensive, time consuming to stop a Company document retention Policy

February 24, 2004: P initiated legal action against D.

D clearly has obligation to preserve relevant evidence. But not before 2/24/2004

March 5, 2004: P’s counsel sent letter to D’s counsel which specifically put D on NOTICE to “prevent spoliation, destruction, alteration, modification, concealment, loss, secretion, or removal of evidence by D.”

Letter is a clear preservation request with particularity

Analysis from E Discovery Perspective

Analysis Post Filing MisconductP argues D fails to monitor compliance with discovery obligations by not conducting system wide “key word” searches.“once a ‘litigation hold’ is in place a party and counsel must make sure that sources of all potentially relevant information are identified and placed ‘on hold.’” Zubulake v. UBS Warburg LLC, 229 F.R.D. at 432.

“it may not be possible to speak to all the key players and a systemwide keyword search may be an alternative”“[r]esponding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own electronic data and documents (The Sedona Principles)

P argues the D was not familiar with his own systemRequest for relief on these shortcomings sweeps too broadly

Court Notes the D is required to undertake reasonable investigation to identify and preserve relevant materials:Litigation Hold does not include inaccessible back up tapes because of undue burden or cost Rule 26(b)(2)(B).

P argues expunging hard drives of ex employees after 2/24/2004 violated D’s obligation to preserve relevant information.P has not proved D intentionally destroyed ESI to deprive P of discoverable information. (= less than thorough)Once ‘litigation hold’ establishes a party can not continue a routine procedure to destroy accessible and relevant ESI

P insists D failed to take affirmative steps to monitor complianceCourt held D failedRule 26(g)(2)- Litigation hold without more will not suffice to satisfy the reasonable inquiry requirementRule 26(g) imposed an affirmative duty to engage in pretrial discovery in a responsible manner

Issues regarding E Discovery Issues

Conclusion : Litigation Holds & Monitoring

•Litigation hold without more will not suffice to satisfy reasonable inquiry requirement of Rule 26(g)(2) to assure client has provided all available information and documents.

•Rule 26(g) imposes an affirmative duty to engage in pretrial discovery in a responsible manner consistent with Rules 26-37.

•Counsel retains an ongoing responsibility •Sanctions can be imposed by court if party violates discovery obligations under Federal Rules of E Discovery.

Discussion

1. What should an organization do after duty to preserve arises?

2. Who should be involved in organization?

3. How should it be communicated? Followed up?

4. Was sanction in Land of Lakes appropriate?