Discovery

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The concept of corporate legal separateness has long been a fortress protecting affiliated business entities such as parents, subsidiaries, and sister companies from various kinds of liability and litigation. However, how much protection does such legal separateness offer the information that corporations gather and store when faced with vehicles of written discovery such as interrogatory requests or requests for production? In other words, if an opposing party requests information or documents from a party that requires that party to seek information or documents from an affiliated non-party entity, is the party then required to seek the requested information or documents from its affiliated non-party entities?

Back in May, we wrote about a pending motion before the U.S. District Court for the District of Columbia, in which the U.S. Department of Justice and several state attorneys general (“DOJ Plaintiffs”) sought to sanction Defendant Google and compel disclosure of all emails withheld for privilege that legal counsel received but never responded to (affectionately referred to as “silent attorney” emails).  The DOJ Plaintiffs claimed the silent attorney emails constituted artificial requests for legal advice intended to conceal sensitive business communications from discovery.  After the parties briefed the issues, the judge ordered that the parties identify cases in support of their positions on whether the judge had the power to issue sanctions for pre-litigation conduct, and further ordered Google to produce a random sample of 210 of the 21,000 “silent attorney” emails for the court’s in camera review.

If a request for legal advice goes unanswered, is it really a request for legal advice?  According to the U.S. Department of Justice and several state attorneys general (“DOJ Plaintiffs”) in an antitrust action against Google, United States, et. al. v. Google, in the U.S. District Court for the District of Columbia, the answer to this question should be “no,” at least where the unanswered request for legal advice is part of an internal company practice intended to conceal sensitive, non-privileged documents from discovery.

The United States Supreme Court is finally set to resolve a Circuit split regarding whether district courts can order discovery for private commercial arbitrations abroad pursuant to 28 U.S.C. § 1782.  The Court granted certiorari in ZF Automotive US, Inc., v. Luxshare, Ltd., No. 21-2736, after another case raising the same question was abruptly abandoned in September 2021.  See Servotronics Inc. v. Rolls-Royce PLC, No. 20-794 (Sept. 8, 2021).  At the heart of the issue is whether Luxshare can use the U.S. court system to get document and deposition discovery from ZF Automotive US, Inc. in the service of a pending private commercial arbitration set in Germany.

Effective as of January 1, 2020, all civil litigants in California will have additional discovery burdens. The California Code of Civil Procedure now requires “[a]ny documents or category of documents produced in response to a demand for inspection, copying, testing, or sampling shall be identified with the specific request number to which the documents respond.”  Cal. Civ. Pro. § 2031.280(a). This is a major departure from the prior rule. Responsive documents can no longer be produced as they were “kept in the usual course of business.”  This new requirement applies to all pending cases in California, regardless of whether a case commenced prior to the amendment’s effective date of January 1, 2020. 

This month, the Second Circuit weighed in on open issues relating to discovery under 28 U.S.C. § 1782. Section 1782 allows federal courts to order entities that “reside[] or [are] found” in their district to produce evidence for use in a proceeding before “a foreign or international tribunal” upon request by “any interested person.”

Those who thought designating social media posts as “private” would be sufficient to shield them from outsiders—including opposing parties in litigation—had better think again. On February 13, 2018, the New York Court of Appeals, New York’s highest court, unanimously held that the rules generally applicable to discovery in civil actions are just as applicable to “private” social media posts, and that they are therefore subject to disclosure if they are “reasonably calculated to contain evidence ‘material and necessary’ to the litigation.”  Forman v. Henkin, New York State Court of Appeals, No. 1 (quoting N.Y. C.P.L.R. 3101(a)).

Late last month, in Klipsch Grp., Inc. v. ePRO E-Commerce Ltd., the Second Circuit affirmed a $2.7 million sanctions award against defendant ePRO after repeated instances of discovery misconduct. Finding that the district court’s award properly reflected the additional costs plaintiff Klipsch Group Inc. was forced to bear due to ePRO’s actions, the Second Circuit disagreed with ePRO that the sanctions were impermissibly punitive and disproportionate. In an era of increasingly complex digital discovery, this case serves as both a sword and a shield: it protects litigants who pursue corrective discovery efforts to remedy an opponent’s willful mishandling of discoverable information, and it punishes litigants who flout their duties to maintain and disclose relevant information.