Owning up to others’ mistakes

Congratulations! You’ve just found a buyer for that old beat-up Cadillac that’s been parked in your driveway for six months. Since the car is an accident waiting to happen (after all, there must be a good reason why you won’t drive it anymore), you really want to make sure that you get your title transferred – especially because you’re canceling your insurance coverage on it effective today. What happens if your buyer hasn’t transferred the vehicle into their name with the county clerk yet, when your beloved Cadillac causes a three-car pileup?

Relax. As long as you follow your obligations under the law, you’ll stay out of hot water. The case of Graham v. Rogers is a good guide to complying with KRS 186A.215.

The seller must execute an assignment and warranty of title (on the back of the certificate) and in certain cases involving older vehicles and certificates of title, do likewise for the application for a new certificate of title. The seller is to then give physical possession of these documents, and the vehicle being sold, to the buyer. This is when ownership of the vehicle passes to the buyer – not when the county clerk receives the new title application.

The buyer is to countersign these documents, and present them to the county clerk for a new certificate of title, within 15 days of the transaction. If the seller knows the buyer hasn’t complied, they can file an affidavit with the county clerk stating that they have transferred their interest in the vehicle.

Magistrate Judge James B. Todd confronted the issue of whether production of data in native format is required in a February 2, 2009 decision. ClassicStar Mare Lease Litigation. (Master File CA-5:07-cv-353-JMH.

GeoStar Corporation had originally objected to producing electronically stored financial data, but the court ordered it to do so. Complying with that order, GeoStar produced what Magistrate Todd called “an extraordinary amount” of financial data in .tiff format, and in .dii load files permitting the parties to export the data to Summation or Concordance databases. The order compelling production did not specify the format for production.

Some of the plaintiffs then requested that Magistrate Todd order the date produced in native format. He did so, but also directed those plaintiffs to depose a GeoStar representative on the impact that production might have on GeoStar’s ongoing operations. He invited GeoStar to move for a protective order if it found one necessary.

GeoStar did make that motion. The dispute basically came down to the plaintiffs’ contention that, to to search this amount of data efficiently, they needed the metadata embedded in the native format files. They argued that this could save them several hundred hours. As Magistrate Todd viewed this argument, the plaintiffs were not arguing that the original production was not in a reasonably useable state, “only that it could be so much more useable in its native format.” It appeared to him that the plaintiffs had received the production they had asked for in their request.

Nevertheless, Magistrate Todd ordered production in native format. During the parties’ discussions about the issue, GeoStar’s counsel wrote a letter stating that the primary objection to producing the records in native format was that they would be useless without the software needed to read those data. That software was believed to cost more than $15,000. The letter stated that GeoStar would produce the data in native format “if you choose to buy the software.” Based on this letter, Magistrate Todd held that he was only enforcing GeoStar’s agreement to produce native data.

Because GeoStar had already produced the data once, and in a reasonably useable format, Magistrate Todd did order the plaintiffs to bear the cost of this second production. He directed GeoStar to provide the plaintiffs with a good-faith estimate of that cost, and based on that estimate the plaintiffs were to notify GeoStar by February 17 if they still wanted the native data.

Update: Ralph Losey of the e-Discovery Team blog (as well as two ABA books on e-discovery) extensively analyzed this opinion and three others involving native format issues in this post. Hearkening to the native-art motif of his post, he quoted Gauguin to summarize the ruling: “A compromise is the art of dividing a cake in such a way that everyone believes that he has got the biggest piece.” He also noted that the court would not have had to reach such a compromise had the parties addressed these issues early on, and if the requesting plaintiffs had done their homework. As he put it: “Do not wait until after you are slammed with Tiff and load to find religion.”

Sixth Circuit judges gathered en banc earlier this month to consider this question: “Does state law control a federal court’s imposition of sanctions as relief for spoliated evidence.”

Earlier opinions from that circuit had held that state law determined whether spoliation sanctions were available and appropriate. That is no longer the rule: “We now recognize—as does every other federal court of appeals to have addressed the question—that a federal court’s inherent powers include broad discretion to craft proper sanctions for spoliated evidence.”

Writing for the Court, Judge Boyce Martin gave two reasons for this ruling:

First, the authority to impose sanctions arises from a court’s powers to control the judicial process, not from substantive state law.

Second, spoliation rulings are evidentiary, and federal courts generally apply their own evidentiary rules.

The case arose from the complaint of a prisoner (Adkins) against a guard (Wolever). Adkins sought a spoliation instruction, alleging that video and photographic evidence of the assault had been destroyed, against prison policy.

Wolever argued against the spoliation instruction, saying the duty was not his to preserve the evidence. It was the duty of prison management. The three-judge panel who originally heard the case agreed with Wolever, based on law of the circuit at that time. (Adkins v. Wolever, 520 F.3d 585 (6th Cir. 2006.)) That opinion (also written by Judge Martin) urged the full court to hear the case, leading to the adoption of the new rule in the Sixth Circuit.

The en-banc Court did not suggest a sanction in the case before it; it held that consideration of sanctions must be case-by-case as “failures to produce relevant evidence fall ‘along a continuum of fault,’” ranging from innocent to negligent to intentional. It remanded the case to the Western District of Michigan for findings regarding where Wolever’s conduct fell on that continuum of fault.

Adkins v. Wolever, Feb. 4, 2006, Sixth Cir. No. 07-1421.

Last month Judge William Bertelsman granted summary judgment against the Kentucky Speedway in its lawsuit against the National Association of Stock Car Racing, Inc. (NASCAR) (E.D.Ky, CA 05-138). The decision reminds us that the Judge decided an e-discovery issue earlier in the same case.

In December 2006 Judge Bertelsman ruled on a request by the Kentucky Speedway to get metadata for almost all the documents it had already received in discovery. He reviewed a case that has been influential in other matters involving the discovery of metadata, Williams v. Sprint/United Management Co., 230 F.R.D. 640 (D.Kan. 2005). Williams held that metadata should be produced as a matter of course, absent an agreement between the parties to the contrary, or a motion by the producing party for a protective order.

Judge Bertelsman rejected that approach, saying that he had the benefit of the amendments to the federal rules (which took effect in December 2006) and the commentary of scholars following Williams. He adopted the approach suggested by the Sedona Principles for Electronic Document Production: a party should not be required to produce metadata absent an agreement to do so, or a court order.

He found unpersuasive the Speedway’s argument that it needed the metadata to establish who created certain documents, or who was the proper custodian of those documents. Judge Bertelsman noted that in many cases the metadata might not provide that information. He also thought the justification was too general. He ordered the Speedway, to the extent that it sought metadata “where date and authorship information is unknown but relevant,” to identify those documents so the defendants could supply that information.

As Kentucky state courts begin to deal with issues of electronic discovery they will look to the experience of federal courts. The co-author of a series of books on the Kentucky Rules of Civil Procedure, Judge Bertelsman has had great influence on the development of procedural law in Kentucky state courts. When similar issues arise in Kentucky courts we can expect his decisions to carry some weight.

Kentucky Speedway (2006 U.S.Dist. Lexis 92028)